CAD widens to 4.4% of GDP in Q2 due to higher trade deficit

The country's current account deficit widened to 4.4 per cent of the GDP in the quarter ended September, from 2.2 per cent GDP during the April-June period, due to higher trade gap, as per data released by the Reserve Bank on Thursday.

"India's current account balance recorded a deficit of $36.4 billion (4.4 per cent of GDP) in Q2:2022-23, up from $18.2 billion (2.2 per cent of GDP) in Q1:2022-23 and a deficit of $9.7 billion (1.3 per cent of GDP) a year ago [i.e., Q2:2021-22]," the RBI said.

Underlying the current account deficit in July-September 2022-23 was the widening of the merchandise trade deficit to $83.5 billion from $63 billion in first quarter of 2022-23 and an increase in net outgo under investment income.

Services exports reported a growth of 30.2 per cent on a year-on-year (y-o-y) basis on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and on a yearly basis.