India reported a current account deficit of USD 23 billion in the quarter ended December 2021. The current account deficit amounted to 2.7 per cent of GDP. India had witnessed current account deficit amounting to 1.3 per cent of GDP in the preceding quarter and 0.3 per cent in the year-ago quarter.
The quarter witnessed net foreign portfolio investment (FPI) outflows of USD 5.8 billion, as against net inflows of USD 21.2 billion a year ago. There was an accretion of USD 465.4 million to foreign exchange reserves, way lower than the accretion of USD 32.5 billion seen in the December 2020 quarter.
Central Government’s gross fiscal deficit (GFD) touched 81.7 per cent of its annual revised target by February 2022. At the same time last year, the government had exhausted 83.4 per cent of its revised deficit target.
Fiscal deficit denotes the amount spent by a government over the total income earned. To put it simply, fiscal deficit occurs when government spending exceeds its revenue. The figure is closely watched by the bond markets.
The index of eight core industries rose by 5.8 per cent on a year-on-year basis in February 2022. The growth was the highest recorded in the last four months. Six of the eight core industries reported a rise in production, while two reported fall.
Cumulative output of eight core industries during April 2021-February 2022 rose by 11 per cent, as against an 8.1 per cent fall registered during the same period a year ago. Among other energy sources, output of crude oil fell by 2.2 per cent, but that of natural gas and refinery products rose by 12.5 per cent and 8.8 per cent, respectively. Steel production grew by 5.7 per cent and cement production grew by 5 per cent. Production of fertilisers, which traditionally has been the smallest contributor to the eight core industries’ output, fell by 1.4 per cent in February 2022.
India has crossed the USD 1 trillion goods trade milestone for the first time even before the 2021-22 fiscal is set to end. With both exports and imports having scaled fresh peaks, the merchandise trade has surpassed the earlier record of USD 844 billion achieved in 2018-19.
The growth comes amid a resurgence of industrial demand in advanced economies and improved domestic consumption with the easing of localised Covid-19 pandemic-related curbs.
India’s automobile exports are likely to reach an all-time high in the financial year 2021-22 with shipments already touching the five million mark for the first time, driven by demand for made-in-India two-wheelers in Africa, Latin America and Southeast Asia.
The growth in overseas shipments has come as a reprieve for the two-wheeler makers who have been struggling to increase volumes in the local market for the last three years. Two-wheeler exports account for nearly 80 per cent of the vehicle shipments from India.
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