Current account deficit flat on-year at 1.1% of GDP

Fourth quarter seen to report current account surplus

- FE BUREAU

INDIA'S CURRENT ACCOUNT deficit (CAD) widened slightly to $11.5 billion in the third quarter of the current fiscal year (Q3FY25), up from $10.4 billion in the same period a year ago, primarily due to a higher merchandise trade deficit.

However, the CAD was still benign at 1.1% of GDP, unchanged from the year-ago level. In Q2FY25, the CAD stood at 1.8% of GDP.

The current quarter (Q4FY25) is expected to see a current account surplus, as trade deficits remained contained in January ($16.5 billion) and February ($14 billion) due to a sharp decline in imports.

"There was a depletion of $37.7 billion in foreign exchange reserves (on a balance of payments basis) in Q3FY25, compared to an accretion of $6 billion in Q3FY24," the Reserve Bank of India (RBI) said in a statement.