Facts you need to know about RBI's current account data
India's current account deficit (CAD) moderated sharply to 3.6 percent of GDP in Q4 of 2012-13 from a historically high level of 6.7 percent in Q3 of 2012-13 as trade deficit narrowed.
June 27, 2013 / 14:35 IST
Moneycontrol Bureau
Unlike its usual practice of releasing the quarterly data at 5PM on the last working day of the quarter, the Reserve Bank of India (RBI) sprang a surprise by releasing January-March (2012-13) quarter data early morning on Thursday, before the market hours. Also read: Funding current account deficit in FY14 to be tough: NomuraFunding current account deficit in FY14 to be tough: Nomura Here are the key highlights of Balance of Payments (BoP)India’s current account deficit (CAD) moderated sharply to 3.6 percent of GDP in Q4 of 2012-13 from a historically high level of 6.7 percent in Q3 of 2012-13 as trade deficit narrowed.Merchandise exports (BoP basis) increased by 5.9 percent in Q4 of 2012-13 as compared with 2.6 percent in Q4 of 2011-12.Merchandise imports recorded a marginal decline of 1.0 per cent in Q4 of 2012-13 as against an increase of 22.6 per cent in Q4 of 2011-12. Essentially non-oil non-gold component of imports showed a decline, reflecting slowdown in domestic economic activity.As a result, trade deficit narrowed to USD 45.6 billion in Q4 of 2012-13 from USD 51.6 billion in Q4 of 2011-12.Net invisibles, however, recorded a decline of 7.7 per cent in Q4 of 2012-13 as compared to a growth of 27.5 per cent in Q4 of 2011-12 on account of decline in net services, transfers and income receipts.Net capital inflows under financial account moderated in Q4 of 2012-13 largely due to slowdown in net portfolio investment and net repayment of loans by banks and corporate. However, net capital inflows were more than adequate to finance CAD, resulting in accretion of US$ 2.7 billion to the foreign exchange reserves.Highlights of BoP during 2012-13During 2012-13, CAD stood at USD 87.8 billion (4.8 percent of GDP) as against USD 78.2 billion (4.2 percent of GDP) during 2011-12.Burgeoning trade deficit along with significant decline in invisible earnings caused widening of CAD during the year.Decline in invisible earning has essentially been on account of sizeable increase of 21.2 per cent in investment income payments, and only a modest rise in net services receipts in 2012-13.The net inflows under financial account during 2012-13 rose to USD 85.4 billion from USD 80.7 billion during the preceding year mainly on account of higher inflows under FII, non-resident deposits and short term credits and advances.
The increase in capital inflows led to an accretion to foreign exchange reserves by USD 3.8 billion during 2012-13.
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