India witnessed a current account deficit of 1.2 per cent of GDP in 2021-22 against a surplus of 0.9 per cent in FY2020-21 due to a wider trade deficit, the Reserve Bank said on Wednesday.
For the January-March 2022 quarter, the CAD narrowed on a sequential basis to USD 13.4 billion or 1.5 per cent of GDP against USD 22.2 billion or 2.6 per cent of GDP in the December 2021 quarter.
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Current account deficit occurs when the value of goods and services imported and other payments exceeds the value of export of goods and services and other receipts by a country in a particular period.
The trade deficit widened to USD 189.5 billion in FY22 from USD 102.2 billion a year ago, which resulted in slippage in the number which is considered a key representation of a country's external strength, the RBI said.
The Balance of Payments data suggested that goods imports stood at USD 618.6 billion in FY22 as against USD 398.5 billion in the year-ago period, leading to the widening of the trade deficit.
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