MUMBAI: India’s current account deficit widened in the April-June quarter, from the previous three months, largely due to a higher trade deficit, lower surplus in net services and a drop in private transfer receipts, the central bank said on Thursday.

The current account deficit widened to $9.2 billion, or 1.1% of GDP, in the first quarter of fiscal 2023/24, from $1.3 billion, or 0.2% of GDP, in the January-March quarter.

The deficit was $17.9 billion, or 2.1% of GDP, in the first quarter a year ago, the Reserve Bank of India’s release showed.

The median forecast in a Reuters poll of 17 economists was for a deficit of $8.9 billion, or 1% of GDP, for the latest first quarter.

Merchandise trade deficit widened to $56.6 billion in the quarter, from $52.6 billion in the preceding quarter, but was less than the year-ago deficit of $63.1 billion.

Net services receipts also decreased sequentially, mainly due to a decline in travel, business services and the exports of computers, the RBI said.

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Private transfer receipts, which are is mainly remittances by Indians employed overseas, moderated to $27.1 billion from $28.6 billion.

The July-September quarter will see a “substantial widening” of the deficit due to the trade balance worsening sequentially, oil and higher core imports rising, and services exports slowing further, said Madhavi Arora, lead economist at Emkay Global Financial Services.

The second-quarter CAD/GDP ratio could range from 2.4% to 2.6%, more than double that of the first quarter, Arora estimated.

India’s merchandise trade deficit widened more than expected to $24.16 billion in August, as per Reuters calculation based on government data earlier this month.

Meanwhile, the country’s balance of payments was a surplus of $24.4 billion in the first quarter, compared with a surplus of $5.6 billion in the preceding quarter and a surplus of $4.6 billion in the year-ago quarter, the RBI said.