India’s current account surplus (CAS) rose to a record $19.8 billion, or 3.9 per cent of GDP, in the April-June quarter as a contracting economy led to a steep decline in imports compared with exports.

The country’s current account surplus was $0.6 billion, or 0.1 per cent of GDP, in the preceding March quarter, while it had reported a current account deficit of $15 billion, or 2.1 per cent of GDP, in the year-ago period.

According to the RBI, the surplus in the current account was on account of a sharp contraction in the trade deficit to $10 billion as merchandise imports fell more sharply relative to exports on a year-on-year basis. During the January-March period, the trade deficit had come in at $35 billion.

While a current account surplus is unusual, it reflects the poor state of the economy which has been hit by the Covid-19 pandemic. The Indian economy had contracted a record 23.9 per cent in the first quarter of this fiscal and economists warn that the financial year will also end up with a double-digit decline.

India’s current account surplus (CAS) rose to a record $19.8 billion, or 3.9 per cent of GDP, in the April-June quarter as a contracting economy led to a steep decline in imports compared with exports.

The country’s current account surplus was $0.6 billion, or 0.1 per cent of GDP, in the preceding March quarter, while it had reported a current account deficit of $15 billion, or 2.1 per cent of GDP, in the year-ago period.

According to the RBI, the surplus in the current account was on account of a sharp contraction in the trade deficit to $10 billion as merchandise imports fell more sharply relative to exports on a year-on-year basis. During the January-March period, the trade deficit had come in at $35 billion.

While a current account surplus is unusual, it reflects the poor state of the economy which has been hit by the Covid-19 pandemic. The Indian economy had contracted a record 23.9 per cent in the first quarter of this fiscal and economists warn that the financial year will also end up with a double-digit decline.