India’s current account deficit widened more than expected in the June quarter as imports outpaced exports amid a decline in inbound remittances.
The shortfall in the broadest measure of trade in goods and services was $9.2 billion, or 1.1% of gross domestic product, according to data compiled by the Reserve Bank of India. It exceeded a median estimate of $8.9 billion deficit in a Bloomberg survey and is wider than $1.3 billion, or 0.2% of GDP, in the previous quarter.
Pricier oil and weaker exports from July are likely to contribute to a further widening trade deficit in the next quarter. However, JP Morgan Chase & Co. adding Indian government bonds to its benchmark index will draw in funds and help ease the pressure on the rupee.
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Here are more details from the statement:
- Private transfer receipts, mainly representing remittances by Indians employed overseas, fell to $27.1 billion in the quarter, from $28.6 billion in the previous quarter
- Net foreign direct investment in the quarter fell to $5.1 billion from $13.4 billion a year ago
