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India's current account deficit pegged below 1% of GDP

The country's balance of payments situation will remain under control and the current account deficit is expected to be below one per cent of Gross Domestic Product for 2002-03, according to RBI's mid-term review of the Monetary and Credit Policy.

"No significant pressures on balance of payments are expected" in this fiscal and the export performance during the current year has been encouraging so far, the apex bank said.

While the surplus on the non-oil account widened from $1.1 billion to $3.2 billion, the deficit on oil account increased marginally from $5.8 billion to $5.9 billion during April-August 2002.

The current account deficit, which averaged 1.0 per cent of GDP over the past ten years, recorded a modest surplus in 2001-02, it said.

India's exports during the first five months of FY-03 at about $19.8 billion, increased by 13.4 per cent over the same period of the previous year, while imports during the same period increased by only 1.7 per cent as against an increase of 3.8 per cent April-August 2001, it said.

As a result, the trade deficit narrowed to $2.7 billion from $4.6 billion in the same period last year, RBI said.

Oil imports grew by 5.3 per cent in US dollar terms as compared with a decline of 5.4 per cent in the same period the previous year. Non-oil imports rose by a mere 0.3 per cent as against an increase of 8.3 per cent in the same period of the previous year.

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Monetary & Credit Policy 2002-2003
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