Country's current account deficit decreased in third quarter, foreign investment also increased

India's current account deficit reduced in the third quarter (Q3) i.e. October-December 2023. This has happened due to reduction in merchandise trade deficit. The deficit for the third quarter (Q3) of the financial year 2024 (FY24) was recorded at $10.5 billion i.e. 1.2% of GDP. Whereas in Q2 of FY24, a loss of $11.4 billion (1.3% of GDP) was recorded.

If we talk about the same quarter a year ago, there was a deficit of $16.8 billion (2% of GDP).

This figure has been revealed from the RBI report released on Tuesday.

The merchandise trade deficit during the third quarter of fiscal year 2023 was $71.6 billion.

Services exports have increased by 5.2% year-on-year due to increasing exports of software, business and travel services. Which helped in reducing the current account deficit.

Expenditures on primary income account increased to $13.2 billion, which was $12.7 billion a year ago.

Indians working abroad sent $31.4 billion, an increase of 2.1% compared to the same time a year ago.

Foreign direct investment was $4.2 billion, up from $2 billion in Q3FY23.

Investments through foreign portfolio investors (FPIs) stood at $12 billion, significantly higher than the $4.6 billion inflows during Q3FY23.

Foreign exchange reserves (on BoP basis) increased by $ 6 billion in the third quarter of FY 2024, compared to an increase of $ 11.1 billion at the same time a year ago.