Buoyancy In Services Exports Narrows Current Account Deficit

New Delhi, Dec 28 (KNN) India's current account deficit (CAD) showed marginal improvement in the September quarter of 2024, reaching USD 11.2 billion or 1.2 per cent of GDP, compared to USD 11.3 billion or 1.3 per cent of GDP in the corresponding period last year, according to data released by the Reserve Bank of India on Friday. 

This represents the second consecutive quarterly deficit following a notable surplus achieved in the January-March quarter of 2024, which marked the country's first positive balance in approximately four years.

The improvement in the current quarter's figures was primarily driven by robust performance in the services sector. 

Services exports demonstrated growth across major categories, including computer services, business operations, travel, and transportation. 

Net services receipts increased to USD 44.5 billion, up from USD 39.9 billion in the previous year, highlighting the sector's growing contribution to India's external balance.

Despite the positive momentum in services, the merchandise trade deficit expanded to USD 75.3 billion from USD 64.5 billion year-over-year, partially offsetting the gains from services exports. 

The latest figures follow a CAD of USD 9.7 billion, or 1.1 per cent of GDP, recorded in the April-June quarter of 2024.

The current account deficit, which occurs when a nation's international spending exceeds its earnings, serves as a crucial indicator of economic health and competitiveness. 

These latest figures provide important insights into India's external sector performance and its ongoing economic trajectory, particularly as the country navigates global trade dynamics and domestic growth objectives.

(KNN Bureau)