RBI : CAD reduces sequentially
to 1.5% of GDP in Q4 as trade deficit moderates
account deficit (CAD) decreased sequentially to $13.4 billion (1.5 per cent of
GDP) in the fourth quarter ended March 2022. CAD was down from $22.2 billion
(2.6 per cent of GDP) in the third quarter ended December 2021.
sequential decline in CAD in Q4 of FY22 was mainly on account of a moderation
in trade deficit and lower net outgo of primary income, the Reserve Bank of
India (RBI) said in a statement.
current account was in deficit to the tune of $ 8.1 billion (1 per cent of GDP)
a year ago (Q4 of FY21).
transfer receipts, mainly representing remittances by Indians employed
overseas, increased to $23.7 billion in Q4 of FY22. It is up by 13.4 per cent
from the level a year ago, RBI said.
Nayar, chief economist, ICRA, said the current account deficit printed well
below forecast of $16 billion in Q4 of FY22, benefiting from
higher-than-expected secondary income.
a year-on-year basis, although gold imports halved, the services trade surplus
this improvement was dwarfed by widening of the merchandise trade deficit. It
was led by imports of commodity inputs such as crude oil, coal and fertilisers
as well as electronic goods, Nayar said.
FY22, the current account balance recorded a deficit of 1.2 per cent of GDP
($38.7 billion) against a surplus of 0.9 per cent ($24 billion) in 2020-21.
This came as the trade deficit widened to $189.5 billion in FY22 from $102.2
billion a year ago.
balance of payments (BoP), there was a drawdown of $16 billion in the foreign
exchange reserves in Q4 of FY22 against an accretion of $3.4 billion in Q4 of
for 2021-22, there was an accretion of $47.5 billion to foreign exchange
reserves. This is lower than the $87 billion in 2020-21.