The Hindu Business Line : Current account slips into deficit

INDIA'S current account slipped into a deficit of $6.4 billion in the second quarter ended September 30, 2004, due to higher oil import bills and a marginal fall in net invisible earnings, according to data released by the Reserve Bank of India.

For the first half of 2004-05, the current account recorded a lower deficit of $3.3 billion. According to RBI, non-oil import also increased during the period, reflecting increased industrial activity.

In the second quarter, merchandise imports surged by 53.5 per cent, more than doubling the 24.6 per cent growth in the previous quarter. Crude and petroleum products were the key drivers of the surge in import payments, indicating a rise of 58.1 per cent in the second quarter over the 57.6 per cent in first quarter. Volume of oil imports was up by 12.7 per cent in the second quarter with prices ranging from $32 to $41 per barrel as against $29 to $35 per barrel in the first quarter.

The trade deficit stood at $12.3 billion during the second quarter as against $5.1 billion in first quarter. For the first half of 2004-05, the trade deficit was at $17.4 billion higher by 86 per cent on a year-on-year basis and already running above the level of the full year 2003-04.

Although invisible receipts rose by 13.0 per cent over the second quarter of 2003-04, they were lower by $2.6 billion as compared to that in the first quarter of the current year.

Software exports remained buoyant in the second quarter broadly maintaining the level achieved in the first quarter.

Remittance from Indians working abroad accounted for 31 per cent of the gross invisible receipts in the second quarter as against 36 per cent in the first quarter. Tourist traffic registered a 26 per cent growth in the six-month period.

Invisible payments declined marginally in the second quarter in relation to the previous quarter although they were higher by 36 per cent on a year-on-year basis. Payments on account of outbound tourist traffic, transportation and other business services continued to rise in line with the expanding demand for travel, imports of services such as business and management consultancy, engineering, technical and distribution services. Other categories of invisible payments remained broadly stable.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
ECBs form 32 pc of forex inflows

Current account slips into deficit

GDP growth slows in Q2

Inflation falls on cheaper manufactured goods

Rupee at nine-month high; securities fall

DEPB rates hiked for textiles

RBI allows trading in power bonds

GoM discusses FDI in print media

Markets end year on high note — Sensex crosses 6600

FDI inflows up 54 pc in 2004

NHB loan at 5% for tsunami victims

Tsunami effect: Chennai Port Trust plans artificial beach

Contributions to The Hindu Relief Fund