Current account surplus rises to $19.8 bn in June quarter
Quote: The surplus in the current account in Q1 of 2020-21 was on account of a sharp contraction in the trade deficit to $10 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis — Reserve Bank of India
Mumbai, September 30
India’s current account surplus increased to $19.8 billion or 3.9% of GDP for the June quarter as merchandise imports declined amid the Covid pandemic, the RBI said on Wednesday.
The country’s current account surplus was $0.6 billion or 0.1% of the GDP in the preceding March quarter, while it had reported a current account deficit of $15 billion or 2.1% of GDP in the year-ago period.
“The surplus in the current account in Q1 of 2020-21 was on account of a sharp contraction in the trade deficit to $10 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis,” the RBI said.
The current account balances, which represents the net of the country’s export and imports of goods and services and also payments made to foreign investors or inflows from them, are considered as an important indicator of a country’s external sector.
In a recent report, domestic ratings agency Icra had said India’s current account will swing to a surplus of $30 billion in FY21 or 1.2% of GDP on a slowdown in imports during the pandemic, but added that it will be a “temporary” phenomenon.
The RBI on Wednesday said net services receipts remained stable at $20.5 billion, as against $20.1 billion in the year-ago period, primarily on the back of net earnings from computer services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.2 billion which is a decline of 8.7% from their level a year ago, the RBI said.
Net outgo from the primary income account, primarily reflecting net overseas investment income payments, increased to $7.7 billion from $6.3 billion a year ago, it said.
