The current account deficit soared to $3.4 billion, or 0.6 per cent of gross domestic product (GDP), in the fourth quarter of fiscal 2017, from $0.3 billion a year ago, the Reserve Bank said on Thursday.
However, on a sequential basis, the gap between forex earnings and expenses, narrowed from $8 billion in the third quarter of FY17.
“The widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit which stood at $29.7 billion, brought about by a larger increase in merchandise imports relative to exports,” RBI said.
Balance of payments for the full financial year stood at $21.6 billion, while for Q4 the same stood at $7.31 billion, according to RBI data.
For the full fiscal 2017, CAD narrowed to 0.7 per cent of GDP from 1.1 per cent in the year ago period on the back of a contraction in trade deficit. In the previous fiscal, trade deficit narrowed to $112.4 billion from $130.1 billion in 2015-16.