Current Account balance deteriorates in Q1

By Our Special Correspondent

CHENNAI, SEPT. 29. The balance of payments position in the first quarter (April-June) of the current year has deteriorated as compared to the last quarter of the previous financial year as per the statistics put out by the Reserve Bank of India today.

The current account deficit has been estimated at $332 million in the first quarter against a positive $607 million in the last quarter of the previous financial year. This translates into a whopping $939 million drop over the previous quarter.

The poor performance on the trade front was mainly responsible for the dismal situation on the current account situation. A modest improvement however in invisibles somewhat checked the decline in current account. These improved to $3400 million from $2932 million in the previous quarter while the merchandise gap further widened to $3732 million in the current quarter from $2325 million in January-March in 2001.

The capital account remained unchanged though there have been variations among the components. Foreign investments grew by only $1390 million in April-June against a rise of $2097 million in the last quarter of 2001. Direct investment dipped to $609 million from $690 million while portfolio investment declined sharply to $950 million from $1609 million previously.

NRI deposits grew slower at $520 million against $639 million. The overall surplus declined sharply to $1462 million in April- June from $3121 million in the last quarter of the previous financial year.

In the financial year ended 2000-01, the current account deficit stood at $2.579 billion and the capital account surplus at $9.023 billion which resulted in an overall balance of $5.856 billion allowing for errors and omissions of $588 million.

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Section  : Business
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