India’s current account deficit narrowed sharply in the January to March quarter, mainly on the back of a moderation in the trade gap and an increase in services exports, the Reserve Bank of India said on Wednesday.

The current account deficit stood at $1.3 billion or 0.2% of GDP in the fourth quarter of fiscal year 2022/23, compared with a revised deficit of $16.8 billion or 2% of GDP in the preceding October-December quarter.

 

The deficit had stood at $13.4 billion in the same quarter a year ago, the release showed.

 

“The sequential decline in CAD in Q4:2022-23 was mainly on account of a moderation in the trade deficit to $52.6 billion in Q4:2022-23 from $71.3 billion in Q3:2022-23, coupled with robust services exports,” the RBI said in the release.

 

A Reuters survey of 22 economists showed the current account balance likely recorded a surplus of $3.3 billion, or 0.4% of gross domestic product (GDP) in the March quarter.

 

Forecasts ranged widely, from a deficit of $5.0 billion to a surplus of $7.8 billion.

 

(Reporting by Swati Bhat and Siddhi Nayak; editing by Sudipto Ganguly)