(Bloomberg) -- India's current-account balance widened to the highest in nearly a decade as the nation's trade gap ballooned and foreign investments fell.
The current account, the broadest measure of the country's overseas trade and services flows, was in a deficit of $23 billion, or 2.7% of gross domestic product, in the three months ended December, the Reserve Bank of India said in a statement on Thursday. The median in a Bloomberg survey of 12 economists was for a deficit of $24.25 billion.
The shortfall in the current account was $9.9 billion, or 1.3% of GDP, in the second quarter period spanning July to September of 2021. In the same period a year ago, the deficit stood at $2.2 billion, or 0.3% of GDP. The balance was in deficit of $31.86 billion in the quarter ended December 2012, according to data on Bloomberg.
India's has been recovering lately as virus restrictions ease after the omicron variant swept through the South Asian nation earlier this year.
“We expect the current account deficit to recede somewhat in Q4 FY2022, to around US$17-21 billion, with the third wave temporarily curtailing certain imports,” said Aditi Nayar, an economist with Icra Ltd. .
More details from the report include:-
- Income from services increased, both sequentially and on a year-on-year basis, on the back of robust performance of net exports of computer and business services
- Private transfer receipts, mainly representing remittances by Indians employed overseas, rose 13.1% from a year ago to $23.4 billion
- Foreign portfolio investment recorded a net outflow of $5.8 billion as against an inflow of $21.2 billion a year ago
- Net foreign direct investment inflows amounted to $5.1 billion, lower than $17.4 billion a year ago
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