India’s current-account deficit narrowed to a fresh four-year low as higher tariffs reduced gold imports, giving Prime Minister Narendra Modi’s government more room to bolster Asia’s third-largest economy.
The shortfall was $1.2 billion in January through March, compared with $4.2 billion for the prior quarter, the Reserve Bank of India said in a statement in Mumbai yesterday. The deficit was equivalent to 0.2 percent of gross domestic product for the quarter, while the gap for the fiscal year shrank to 1.7 percent from a 4.7 percent in the previous 12 months. The current account is the broadest measure of trade.
A shrinking shortfall will bolster India’s rupee that has rebounded from a record low on optimism Modi, who was sworn in yesterday, will spur growth from near a decade low. A stronger currency will make imports cheaper, while Modi works toward boosting manufacturing and exports to fulfill his campaign promises of a stronger economy, more jobs and better roads.
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