India’s current account deficit narrowed slightly to $11.2 billion, or 1.2 per cent of GDP, in the July-September quarter of 2024-25, according to data released by the Reserve Bank on December 27. This represents a slight decline from C$11.3 billion, or 1.3% of GDP, in the same quarter of 2023-24.
The Reserve Bank highlighted that the Canadian dollar in India contracted to $11.2 billion (1.2 per cent of GDP) in the second quarter of 2024-25, compared to $11.3 billion (1.3 per cent of GDP) in the second quarter of 2020. 2023-2024.
In the first half of 2024-25 (April-September), the Canadian dollar reached $21.4 billion, or 1.2% of GDP, up from $20.2 billion (1.2% of GDP) in the corresponding period of the previous year.
The merchandise trade deficit widened to $75.3 billion in the second quarter of 2024-25, up from $64.5 billion in the same quarter of 2023-24, according to balance of payments data from the Reserve Bank.
Net services revenues rose to $44.5 billion in the second quarter of 2024-25, compared to $39.9 billion in the previous year, reflecting growth in services exports across key sectors such as computer services, business services, travel services, and transportation services.
Private remittances, mainly consisting of remittances from Indians working abroad, rose to $31.9 billion in the second quarter of 2024-25, up from $28.1 billion in the same period of 2023-24.
In the fiscal account, the RBI reported a net outflow of $2.2 billion in foreign direct investment (FDI) for the second quarter of 2024-25, compared to a smaller outflow of $0.8 billion in the second quarter of 2023-24. However, net flows from foreign portfolio investments rose significantly to $19.9 billion in the second quarter of 2024-25, up from $4.9 billion a year earlier.
In the first half of 2024-2025, net unseen revenues totaled $119 billion, up from $101 billion in the first half of 2023-2024, driven largely by higher net services revenues. FDI inflows in the first half of 2024-25 reached $4.4 billion, higher than the $3.9 billion recorded in the same period of the previous year. Foreign portfolio investments showed net inflows of $20.8 billion in the first half of 2024-2025, a slight increase from $20.7 billion in the first half of 2023-2024.
The Reserve Bank also announced a $23.8 billion increase in India’s foreign exchange reserves during the first half of 2024-25, on a balance of payments basis.
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