India Economy Watch - Current Account Posts A Deficit In Q2: Motilal Oswal
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Motilal Oswal Report
India’s current account balance saw a nine-quarter high deficit of $9.6 billion (or 1.3% of gross domestic product) in Q2 FY22, lower than the consensus of $10.6 billion and following a surplus of $6.6 billion (0.9% of GDP) in Q1 FY22.
It means that there was a small current account deficit of $3 billion (or 0.2% of GDP) in H1 FY22 as compared to a surplus of 3% of GDP in H1 FY21 and a deficit of 1.6% of GDP in H1 FY20.
The wider current account deficit in Q2 FY22 was mainly on account of a larger merchandise trade deficit. A spurt in imports (up 70% YoY in Q2) vis-a-vis exports (up 39% YoY) led to wider merchandise trade deficit.
Excluding gold, current account surplus narrowed to a six-quarter low of $6.4 billion (or 0.9% of GDP).
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