India’s Current Account Deficit (CAD) narrowed sharply to $0.3 billion, that is 0.1% of GDP, in the fourth quarter of FY16, significantly lower than $7.1 billion (1.3% of GDP) in Q3, RBI data showed. This is however, marginally lower than $0.7 billion (0.1% of GDP) in Q4 of 2014-15.
The contraction in CAD was primarily on account of a lower trade deficit, $24.8 billion, than in Q4 of last year ($31.6 billion) and $34.0 billion in the preceding quarter, RBI said.
Here are the key points of the Q4 FY16 Balance of Payments data released by RBI:
> Net services receipts declined on a y-o-y basis largely due to fall in exports of transport, financial services and telecommunication, computer and information services.
> Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $15.7 billion, a decline from their level in the preceding quarter as well as from a year ago.
> Net foreign direct investment moderated to $8.8 billion in Q4 of 2015-16 from $9.3 billion in Q4 of 2014-15.
> Portfolio investment recorded a net outflow of $1.5 billion in Q4 of 2015-16 as against a net inflow of $12.5 billion in the corresponding period of last year; primarily reflecting net outflow in the debt segment.
> Non-resident Indian (NRI) deposits, however, increased in Q4 of 2015-16 over their level in Q4 last year as well as the preceding quarter.
> Foreign exchange reserves (on a BoP basis) increased by $3.3 billion in Q4 of 2015-16.
BoP during April-March 2015-16:
> The CAD narrowed to 1.1 per cent of GDP in 2015-16 from 1.8 per cent in 2014-15, on the back of contraction in the trade deficit.
> India’s trade deficit narrowed to $130.1 billion in 2015-16 from $144.9 billion in 2014-15.
> Net invisible receipts declined in 2015-16, primarily reflecting moderation in both net services earnings and private transfer receipts.
> Net FDI inflows during 2015-16 ($36.0 billion) rose sharply by 15.3 per cent over the level in 2014-15.
> Portfolio investment, however, recorded a net outflow $4.5 billion in 2015-16 as against a net inflow of $40.9 billion last year.
> In 2015-16, there was an accretion of $17.9 billion to foreign exchange reserves (on a BoP basis) as compared with $61.4 billion in 2014-15.