(Bloomberg) -- India's current-account deficit narrowed last quarter as a slowdown in the economy sapped imports.
The shortfall was $4.6 billion in the January-March period, or 0.7% of gross domestic product, the Reserve Bank of India said in a statement in Mumbai on Friday. That compares with a median $6.1 billion deficit estimated in a Bloomberg survey.
Key Insights
- The gap is smaller than the previous quarter's $17.7 billion, or 2.7% of GDP. It compares with a deficit of 1.8% of GDP in the year-earlier period
- The deficit narrowed as imports slowed sharply during the quarter on the back of a broader slump in consumption, which accounts for more than 60% of India's GDP. A decline in discretionary consumer purchases came amid growth in Asia's third largest economy cooling to a five-year low of 5.8% in the three months to March
- Bloomberg Economics' Abhishek Gupta said the key reason for a narrower current-account gap was lower crude oil prices. Reduced investment income outflows and higher remittances relative to a year-ago period also caused the gap to shrink
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- The gap in merchandise trade narrowed to $35.2 billion in the quarter to March from a gap of $41.6 billion the previous year
- Net services receipts increased by 5.8% year-on-year, the RBI said
- To read the full RBI statement, click here
--With assistance from Ashutosh Joshi.
To contact the reporter on this story: Anirban Nag in Mumbai at anag8@bloomberg.net
To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram, Arijit Ghosh
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