Current Account Deficit (CAD) Overview
The country's current account deficit (CAD) slightly improved to $11.2 billion, which is 1.2% of the GDP, in the July-September 2024 quarter. This is a marginal decline from $11.3 billion or 1.3% of GDP during the same period the previous fiscal year.
- April-September Period (H1 FY2024-25):
- CAD was $21.4 billion (1.2% of GDP) compared to $20.2 billion (1.2% of GDP) in H1 2023-24.
- Definition: CAD is the difference between exports and imports of goods and services, indicating the health of the external sector.
Merchandise and Services Trade
- Merchandise Trade Deficit: Increased to $75.3 billion in Q2 FY2024-25 from $64.5 billion in the same period of FY2023-24.
- Net Services Receipts: Rose to $44.5 billion in Q2 FY2024-25 from $39.9 billion a year ago.
- Services exports showed year-on-year growth across various categories such as computer, business, travel, and transportation services.
Private Transfers and Investments
- Private Transfer Receipts: Increased to $31.9 billion in the second quarter from $28.1 billion in the same period last year.
- Net Foreign Direct Investment: Recorded an outflow of $2.2 billion in the reporting quarter, compared to $0.8 billion the previous year.
Foreign Portfolio Investment (FPI) and Deposits
- Net FPI Inflows: Increased to $19.9 billion in Q2 2024-25, up from $4.9 billion in Q2 2023-24.
- For April-September 2024, net FPI inflows were $20.8 billion, slightly above the $20.7 billion a year ago.
- Non-Resident Deposits (NRI deposits): Net inflows rose to $6.2 billion in Q2, higher than $3.2 billion the previous year.
Foreign Exchange Reserves
There was an accretion of $18.6 billion to the foreign exchange reserves on a balance of payment basis in Q2 FY2024-25, much higher than the $2.5 billion recorded in Q2 FY2023-24.
