In charts: India's journey from 'deficit' to 'surplus'
Positive for the Indian currency, Rupee, India is likely to post its first current account surplus in nine years in the first quarter of this fiscal year. The Reserve Bank of India is expected to announce the June quarter data this month.
According to Reuters' estimates, in April-June quarter, India can see a surplus of $4 billion, or 0.8% of GDP. That compared with a deficit of $6.2 billion, or 1.2% of GDP during the same quarter a year ago.
With the similar view, Japanese brokerage Nomura said that the country may post first current account surplus since 2007 at $4 billion.
Current Account Deficit (CAD), or the difference between inflow and outflow of foreign exchange, came in at 1.1% of GDP in 2015-16, 1.3% in 2014-15, 1.7% in 2013-14 and a record high of 4.8% of GDP in 2012-13.
The highest ever CAD in FY13 was one of the biggest reasons which wrecked the rupee, following the taper tantrums and made the currency the worst performing one, the Nomura report said.
The current account gap had come in at a deficit of $0.3 billion (nearly Rs 1,995.83 crore) in the preceding quarter of January-March.
According to the data available from Ministry of Finance, from 1949 until 2012, India’s Current Account averaged $1.32 billion. It reached an all-time high of $7.36 billion in March of 2004. It hit a record low of $22.30 billion in September 2012.
As per the data, in 2012, was the period where the value of crude imports and gold was also very high.
According to the data, India’s trade deficit widened to $20 billion in January 2012. This put pressure on the current account deficit. This gap is the result of weak exports and high imports.
After contracting for eight months,the exports increased marginally by 0.82% to $ 25.58 billion in January India’s imports was at $45.58 billion an increase of 6.12%. This left a trade of $20 billion.
However, on Thursday, Ministry of Commerce and Industry said that India's merchandise exports have declined for the second consecutive month, whereby falling marginally by 0.30% for the August month.
The country's exports during the month fell $21.51 billion as against $ 21.58 billion in the same month last year.