Current account deficit to 2% of GDP in 2022-23 due to increase in trade deficit

India Current Account Deficit: Due to the increase in trade deficit, the current account deficit has increased to 2 percent of GDP in 2022-23, whereas in 2021-22, there was a deficit of 1.2 percent in the current account balance. There has been a trade deficit of $ 265.3 billion in 2022-23, which was a trade deficit of $ 189.5 billion in 2021-22, due to which there has been a jump in the current account deficit. According to RBI data, there is a current account deficit of $ 67 billion in 2022-23, which was $ 38.7 billion in 2021-22.

However, the current account deficit has come down in the fourth quarter. India’s current account deficit has come down in the fourth quarter of FY 2022-23 due to reduction in trade deficit and boom in services exports. Current account deficit has come down to $1.3 billion or 0.2 per cent in the fourth quarter of the last financial year. Whereas in the third quarter of 2022-23, the current account deficit stood at 2 per cent of GDP at $16.8 billion. Whereas before this, in the fourth quarter of the financial year 2021-22, this loss was $ 13.4 billion.

Releasing this data, RBI has said that the reason for the decrease in current account deficit quarter by quarter was the decline in trade deficit. The trade deficit in the third quarter, where it was $71.3 billion, declined to $52.6 billion in the fourth quarter.

According to the data, net foreign investment in the fourth quarter was $ 6.4 billion, which was $ 2 billion in the third quarter. But less than $13.8 billion a year ago. At the same time, FDI inflow in 2022-23 has been $ 28 billion, which is less than $ 38.6 billion in 2021-22. In the fourth quarter of 2022-23, due to the selling of foreign investors in the stock market, there has been an outflow of $ 1.7 billion from foreign portfolio investors. While an outflow of $ 15.2 billion was seen a year ago.

The fourth quarter from January to March saw remittances of $28.6 billion from Indians living abroad, up 20.8 per cent from the same quarter a year ago.

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