Current account deficit for 4QFY11 narrowed sharply to USD5.4bn : Emkay

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Current account deficit for 4QFY11 narrowed sharply to USD5.4bn

India's current account deficit narrowed sharply to USD5.4bn in Q4FY11, compared with USD 12.8bn deficit in the same quarter last year. The decline in current deficit was led by moderation in trade deficit, resulting from higher growth in exports than imports, coupled with turnaround in net invisibles surplus. The exports grew by 47%yoy, while imports grew by a lower 27.3%yoy, resulting in 5.4%yoy decline in trade deficit. Moreover, the invisible earnings grew by a significant 32.2% yoy to USD24.5bn primarily driven by higher software services exports and private remittances. However the capital account inflows remain weak at USD7.4bn in Q4FY11, primarily Led by lower foreign direct investment (FDI) and portfolio inflows.