India’s current account surplus moderated to $15.5 billion (2.4 per cent of Gross Domestic Product) in quarter ended September 2020 (Q2FY21) from $19.2 billion (3.8 per cent of GDP) in (Q1FY21).
The current account balance was in deficit to the tune of $7.6 billion in Q2 of 2019-20 (1.1 per cent of GDP), according to Reserve Bank of India data.
The narrowing of the current account surplus in Q2 of 2020-21 was on account of a rise in the merchandise trade deficit to $14.8 billion from $10.8 billion in the preceding quarter.
Aditi Nayar, Principal economist, Icra said the current account surplus in Q2 FY2021 printed modestly higher than the rating agency's expectation of $13-14 billion, led by a slightly narrower merchandise trade balance and a larger than expected revival in remittances.
The country’s current account surplus in the April-September 2020 (H1FY21) was 3.1 per cent of GDP as against a deficit of 1.6 per cent in H1FY20 on the back of a sharp contraction in the trade deficit.
India’s current account balance is expected to post a surplus of $35-40 billion or around 1.5 per cent of GDP in FY2021, Nayar added.
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