India’s current account deficit (CAD) narrowed sharply to $0.3 billion, or 0.1 per cent of GDP, in the fourth quarter of 2015-16 from $7.1 billion, or 1.3 per cent, in third quarter, on account of lower trade gap.
For the entire 2015-16 fiscal, CAD -- the difference between the inflow and outflow of foreign exchange -- shrank to 1.1 per cent of the GDP.
“CAD narrowed sharply to $0.3 billion, or 0.1 per cent of GDP, in Q4 FY2015-16, significantly lower than $7.1 billion, or 1.3 per cent, in Q3 and marginally lower than $0.7 billion, or 0.1 per cent, in Q4 FY2014-15,” the Reserve Bank said on Thursday.
The contraction in CAD in the fourth quarter of the last fiscal was primarily on account of lower trade deficit, which stood at $24.8 billion compared to $31.6 billion in the corresponding quarter a year ago.
For the full fiscal 2015-16, CAD stood at 22.1 billion, or 1.1 per cent of GDP, as against $26.9 billion, or 1.8 per cent of GDP, in 2014-15, on the back of contraction in the trade deficit.
The country’s trade deficit narrowed to $130.1 billion last fiscal from $144.9 billion in 2014-15.
The overall Balance of Payment (BoP) during the fiscal moderated to $17.9 billion from $61.06 billion in 2014-15.
During the fiscal, there was decline in net invisible receipts, reflecting moderation in both net services earnings and private transfer receipts.
Net FDI inflows during the last fiscal stood at $36 billion, up sharply by 15.3 per cent over the level in 2014-15, the apex bank said.
Portfolio investment, however, recorded a net outflow of $4.5 billion during the fiscal as against a net inflow of $40.9 billion in 2014-15.
In 2015-16, there was an accretion of $17.9 billion to foreign exchange reserves (on BoP basis) as compared with $61.4 billion in 2014-15, RBI said.