Current account gap widens to 4.9% of GDP in Q1: RBI

High imports of gold and oil pushed Current Account Deficit (CAD) to 4.9% of GDP to USD 21.8 billion in the April-June quarter of the current fiscal, RBI said on Monday.

CAD, the difference between inflow and outflow of foreign exchange, was 4.4% or USD 16.9 billion in the same quarter of last fiscal, 2012-13.

"The trade deficit, coupled with a slow recovery in net invisibles (income and services), led to widening of CAD to USD 21.8 billion in Q1 of 2013-14 from USD 16.9 billion in Q1 of 2012-13," RBI said in its Balance of Payments statement.

CAD had declined to 3.6% in the January-March quarter after touching a record high of 6.5% in the October-December quarter.

The government plans to bring down CAD to 3.7% or USD 70 billion in the 2013-14 fiscal, from 4.8% or USD 88.2 billion in 2012-13.

Gold imports increased by USD 7.3 billion in the first quarter of current fiscal. The imports stood at about 335 tonnes in the April-June quarter.

"Excluding the increase in gold imports of USD 7.3 billion in Q1 of 2013-14 over the corresponding quarter of the preceding year, CAD would work out to USD 14.5 billion, which translates into 3.2% of GDP," the Reserve Bank said.

RBI said there was a small draw down on country's foreign exchange reserves to finance the CAD.

"On BoP basis, there was a slight draw down in foreign exchange reserves of USD 0.3 billion in Q1 of 2013-14 as against an accretion of USD 0.5 billion in Q1 of 2012-13," it said.

During the quarter, while exports declined by 1.5%, imports recorded an increase of 4.7%. The trade deficit widened further to USD 50.5 billion in Q1 of 2013-14, from USD 43.8 billion a year ago, it said.