MUMBAI, Dec 26 Reuters India39;s current account deficit narrowed more than expected in the JulySeptember quarter largely due to a lower merchandise trade deficit while services exports also grew, the central bank said in a statement on Tuesday.

The current account deficit stood at 8.3 billion, or 1 of GDP, in the second quarter of fiscal 202324 compared with 9.2 billion or 1.1 of GDP in the preceding quarter.

The CAD had been at 30.9 billion or 3.8 in the same quarter a year ago.

The median forecast in a Reuters poll of 18 economists was for a deficit of 9 billion.

Following the expansion in the merchandise trade deficit in October 2023, we expect the CAD for the ongoing quarter to widen appreciably, to around 1820 billion, said Aditi Nayar, Chief Economist, Head Research at rating agency ICRA, adding that the Q2 number was well below their forecast of 13 billion.

Nevertheless, we now foresee the FY2024 CAD in a range of 1.51.6 of GDP, unless commodity prices chart a sharp rebound.

Merchandise trade deficit narrowed to 61 billion in the quarter, from 78.3 billion in the yearago quarter.

Services exports grew by 4.2 on a yoy basis on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and on a yoy basis, the central bank said.

India39;s merchandise trade deficit narrowed sharply to 20.58 billion in November from the previous month39;s record levels as imports of gold, petroleum and electronic…