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Current account deficit narrows to 2.5%
Why is it in the news?
- India's current account deficit narrowed to 2.5% of GDP sequentially in the December quarter (Q3).
- India's fiscal deficit in the 11 months to February 2019 rose to 134% of the budgeted target
More in the news
- As per the latest data released by the Reserve Bank of India (RBI), India’s current account deficit (CAD) for the third quarter narrowed to 2.5% of the GDP compared with 2.9% in the preceding quarter.
- In absolute terms, CAD was $16.9 billion in Q3 compared with $19.1 billion in the second quarter.
- The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit at $49.5 billion compared with $44 billion a year ago.
- Also Net foreign direct investment at $7.5 billion in Q3 of 2018-19, increased from $4.3 billion in Q3 of 2017-18.
- Balance of Payment eased:
- India’s balance of payment eased mainly on account of falling oil prices, while lower-than-expected tax collections and continuing government spending were responsible for the widening fiscal deficit.
Source
The Hindu, ET.