India’s current account deficit increased to $ 19.6 billion

India’s current account deficit increased to $ 19.6 billionAccording to the latest data released, India’s current account deficit (CAD) increased to about US $ 19.6 billion during the quarter till December 2011 due to a significant fall in exports.

The CAD rose to 4.3 per cent against 2.3 per cent or USD 10.1 billion in the same period in the previous year, according to the data released by the Reserve Bank of India (RBI). The country’s trade deficit increased to US $ 47.7 billion in the quarter against US $ 31.4 billion previous year.

The merchandise exports grew by 7.9 per cent in the quarter compared to 39.9 per cent in the same quarter of the previous year. On the other hand, orts rose 22 per cent in the same period compared to 24.7 per cent.

"The balance of payment experienced a significant stress in Q3 as trade deficit widened and capital inflows fell far short of financing requirements resulting in significant drawdown of foreign exchange reserves," the central bank said.

The RBI also said that the net services in the third quarter increased by 20.3 per cent against 47.5 per cent in the same period previous year while the net secondary income receipts involving private transfers increased 30.6 per cent to US $ 17.5 billion from US $ 13.4 billion.

The report showed that the CAD increased to US $ 53.7 billion or 4 per cent of GDP from US $ 39.6 billion or 3.3 per cent of GDP during the April-December period on the financial year.

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