India Posts Rare Current Account Surplus in Jan.-March Quarter

(Bloomberg) -- India’s current account posted a rare surplus last quarter, as measures to contain the coronavirus pandemic crimped imports.

The surplus was $600 million in January-March, or 0.1% of gross domestic product, the Reserve Bank of India said in a statement in Mumbai on Tuesday. The median in a Bloomberg survey of 15 economists was for a deficit of $3 billion.

Key Insights

• The current account was in a deficit of $4.6 billion, or 0.7% of GDP, in the year-ago period
• The reason for the surplus last quarter was mainly due to a lower trade deficit at $35 billion and a sharp rise in net invisible receipts at $35.6 billion, the RBI said
• Imports were subdued during the quarter on the back of a broader slump in consumption, which accounts for more than 60% of India’s GDP. Lower oil prices also helped in bringing down India’s overall import bill
• Remittances by Indians employed overseas and other private transfers rose 14.8% from a year ago to $20.6 billion, while net services receipts increased, the RBI said

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• Net foreign portfolio investment declined by $13.7 billion, while foreign direct investment inflows during the period were higher at $12 billion, compared with $6.4 billion in the January-March quarter of last year
• To read the full RBI statement, click here

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