Current account deficit dips to 1.2% of GDP

MUMBAI: India’s current account deficit narrowed to 1.2% of GDP in Q2 FY25, slightly below the 1.3% in the year-ago period, according to RBI data. This was despite significant worsening of the trade deficit. In absolute terms, the CAD declined to $11.2 billion in Q2 FY25 from $11.3 billion in the same period last year, supported by robust services exports and remittance inflows. The merchandise trade deficit expanded to $75.3 billion, up from $64.5 billion a year ago, driven by higher gold imports. Services exports increased to $44.5 billion in Q2 FY25 from $39.9 billion in Q2 FY24, offsetting pressures from the widening trade gap.