FY15 Current Account Deficit Estimated at 1.3%: RBI

Mumbai: Current account deficit is estimated to come down to 1.3 per cent of GDP in the fiscal year ending March, helped by moderation in petroleum and gold imports, the Reserve Bank of India said on Tuesday.

Current account deficit, which is the difference between the inflow and outflow of foreign exchange, was 1.7 per cent of GDP ($32.4 billion) in 2013-14. It was at a record high of 4.7 per cent ($88 billion) in 2012-13.

"The estimate of the current account deficit for 2014-15 is currently placed at 1.3 per cent of GDP, significantly lower than earlier projections," the RBI said in its bi-monthly monetary policy statement.

The fall in international crude prices translated into a sizable saving on account of petroleum oil lubricant (POL) imports. Gold imports also moderated, coming off the seasonal-cum-pent-up demand spurt in September-November, it said.

Further, non-oil non-gold import growth remained firm and in positive territory.

Current account deficit in the April-September period of current fiscal year stood at 1.9 per cent ($17.9 billion), down from 3.1 per cent ($26.9 billion) in the same period in 2013-14.

"The CAD (current account deficit) has been comfortably financed by net capital inflows, mainly in the form of buoyant portfolio flows but also supported by foreign direct investment inflows and external commercial borrowings," the RBI said.

India's trade deficit declined to a 10-month low of $9.43 billion in December 2014, mainly on account of falling imports due to slump in crude prices, though exports too have come down.

Imports bill dropped 4.8 per cent to $34.8 billion during the month from $36.6 billion from December 2013, leading to improvement in the trade balance situation.