India’s current account balance sees $5.7 bn surplus in Q4FY24: RBI

India’s current account balance registered a surplus of $5.7 billion during the fourth quarter of the fiscal year 2023-’24 that ended in March 2024, or Q4FY24, according to new data from the Reserve Bank of India (RBI). The amount is 0.6 per cent of the nation’s Gross Domestic Product (GDP).

The surplus, coming after 10 quarters, is primarily driven by steady services trade exports and lower merchandise trade deficit. The RBI report showed net services receipt in Q4FY24 was $42.7 billion compared to $39.1 billion in the previous year. The upward surge in services receipts was a major contributor in registering the surplus in current account balance during Q4FY24.

The RBI’s data also highlights a departure from recent current account balance trends in terms of deficit. The quarter that ended in December 2023 (Q3FY24) saw a Current Account Deficit (CAD) of $8.7 billion, which was 1 per cent of GDP. The CAD was $1.3 billion, 0.2 per cent of GDP, during the fourth quarter of the previous financial year, or Q4FY23. Overall, the CAD dropped from $67 billion, or 2 per cent of GDP, in FY23 to $23.2 billion, or 0.7 per cent of GDP, in Q4FY24. While CAD could see a jump in FY25, the deficit would be controllable at around 1 to 1.2 per cent of GDP.

FOREX RESERVES GREW 6 TIMES

Shedding light on foreign exchange reserves, data in the RBI report showed that forex reserves rose six time from the Q4FY23 figure of $5.6 billion to reach a staggering $30.8 billion in Q4Fy24. This was excluding valuation effect. Overall, there was an addition of $63.7 billion in FY24 compared to a drop of $ 9.1 billion in FY23. The RBI report also showed that net invisible receipt for FY24 was better than a year ago owing mainly to transfers and services.

The report also shows that there was an 11.9 per cent hike in private transfer receipts, which signifies remittances by Indians who are employed overseas. This was worth $32 billion in the current quarter. Meanwhile, the net outgo on primary income account, which reflects payments of investment income, rose from $12.6 billion a year ago to $14.8 billion.