India’s current account balance recorded a deficit (CAD) of $36.4 billion (or a nine year high of 4.4% of GDP) in the quarter ended September 2022, rising from $18.2 billion (2.2%) in the previous quarter.
- Deficit for the year earlier period came in at $9.7 billion (1.3%), according to data released by the Reserve Bank of India (RBI) on December 29.
- A sharp deterioration in the CAD was expected, given the rise in global commodity prices following Russia’s invasion of Ukraine in late February. This resulted in India’s import bill ballooning to nearly $200 billion in July-September.
About current account deficit
- According to the IMF, the current account can be expressed as the difference between the value of exports of goods and services and the value of imports of goods and services.
- A deficit then means that the country is importing more goods and services than it is exporting.
- The current account also includes net income (such as interest and dividends) and transfers from abroad (such as foreign aid), which are usually a small fraction of the total.
