$ 5.7  billion surplus in Current Account in the  fourth quarter of Fiscal 2024

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By our  Financial Correspondent

Mumbai, June  25 (IVC)  India’s current account balance recorded  a surplus of $5.7  billion (0.6 per cent    of GDP) in the fourth quarter  of the fiscal 2024,  against  a      deficit  of $1.3 billion  (0.2 per cent of GDP)  a year ago as  per data released by  the  Reserve  Bank of India (RBI)  here  yesterday.

                The merchandise trade deficit  stood at $50.9 billion  in the fourth   quarter of the  financial year 2024  was lower  than $52.6 billion a   year  ago and the fourth  quarter   services exports grew  4.1 per  cent  year-on-year  on the back  of rising  software exports, travel and  business  service , RBI data revealed.

                “India’s current  account  turned to  a welcome  surplus in the  fourth of the  financial  year  2024 after  a  gap  of ten quarters, exceeding ICAR”s more  modest expectations.  The   turnaround to  a  surplus  from deficit  in the  year-ago  period, was  primarily  driven  by a narrowing  in the  merchandise trade deficit print to  a  ten-quarter  low of $50.9 billion in Quarter four  of  the  financial  year 2024 from $69.9 billion in quarter three  of the  fiscal 2024” Aditi Nayar , Chief  Economist , ICAR said in her comment.

                Net  services at $42.7  billion  was  higher  than  a year ago ($39.1 billion) which  contributed  to the  current account surplus in the quarter four of  the  financial year2024, it  added. As per  RBI’s data, net  outgo on  the  primary income  account, mainly  on payments  of  investment income  rose  to $14.8 billion from $12.6  billion year-on-year.

                Private  transfer receipts , mainly  representing remittances  by  overseas  Indians was  $32 billion, a  rise  of 11.9 per  cent  year-on-year. In  the  financial account, net foreign  direct  investment flows  were $2 billion in the  fourth   quarter of the  fiscal 2024 compared  with  $6.4  billion  a  year  ago.

                Net  foreign portfolio investment recorded an  inflow of $11.4  billion in the  fourt  quarter of  the  fiscal  2024  from a net  outflow of $1.7 billion a  year  ago.

                Non-Resident  deposits recorded a  higher net inflow of $5.4 billion than $3.6 billionin Q4 FY23. There  was  an accretion of  foreign exchange  reserves to  the  tune of $30.8 billion  excluding valuation  effects in the fourth quarter of the fiscal 2024 compared   with $5.6  billion a  year  ago.

                Overall India’s  financial  year 2024  current  account  deficit  moderated to $23.2 billion (0.7 per cent  of GDP)    from $67.0 billion (2%  GDP)  in the  financial year  2023. Net  invisibles receipt was  higher during the  financial  year2024 than  a  year  ago,  primarily  on  account of  sevices and  transfers.  In the financial year 2024, portfolio  investment  recorded  a  net  flow  of  $44.1 billion against an outflow of  $5.2  billion a year  ago. Net  Foreign Direct  inflow  in the fiscal 2024 was $ 9.8 billion compared with $28 billion in the  fiscal 2023.

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