Country's current account deficit (CAD) in the first quarter ended June has widened sharply to 2.4% of the gross domestic product (GDP), from 0.1% a year ago and 0.6% in the fourth quarter.
In absolute terms, CAD, which is the difference between imports and exports, was at $14.3 billion in the first quarter of 2017-18 as against $0.4 billion in year ago period and $3.4 billion in the fourth quarter of 2016-17.
The rise in CAD was on account of high trade deficit at $41.2 billion, “brought about by a larger increase in merchandise imports relative to exports,” said Reserve Bank of India (RBI) on its website.
Exports have been falling, partially because a strong rupee is making exports uncompetitive.
On the positive side, net foreign direct investment in the country doubled to $7.2 billion in the first quarter from its year ago level. Net portfolio investment too recorded substantial inflow of $12.5 billion in Q1 of 2017-18, primarily in the debt segment, as compared with $2.1 billion in the year ago quarter, RBI said.
Private transfer receipts, mainly representing remittances by Indians employed overseas, rose by 5.3% to $16.1 billion over the year ago quarter.