Economy to close FY21 with current a/c surplus: RBI

Mumbai, July 27

For the first time since FY04, the economy is set to close the current fiscal with a current account surplus of 0.4% of GDP, boosted by falling imports and crude prices, and not driven by better exports, according to a report.

After many quarters, the economy logged in a marginal current account surplus in June quarter at 0.1% or $600 million as against a deficit of $4.6 billion or 0.7% of GDP in FY19, according to the latest RBI data.

For fiscal 2020, current account deficit (CAD) improved to 0.9% of GDP from 2.1% in FY19.

“For the first time since FY04, the economy is set to register a small current account surplus of 0.4% of GDP in FY21…led by weak domestic demand and lower crude prices leading to a collapse in imports rather than a strong export recovery,” Tanvee Gupta Jain, the house economist at UBS Securities India said.

According to the RBI, in FY04, the country logged in current account surplus at $10.6 billion which was 1.8% of GDP of that year.

However, she added the surplus trend will not be sustained for long as rising crude prices, gradual recovery in domestic demand and only a modest recovery in exports will reverse the trend. — PTI

First time since FY04

• For the first time since FY04, the economy logged in a marginal current account surplus in June quarter at 0.1% or $600 million
• For fiscal 2020, current account deficit (CAD) improved to 0.9% of GDP from 2.1% in FY19
• In FY04, the country logged in current account surplus at $10.6 billion which was 1.8% of GDP of that year