New Delhi, Sept. 2 -- India's current account, which measures the flow of goods, services, and investments into the economy, returned to a deficit during the first quarter of 2026-26. The lower deficit is a welcome development as it eases pressure on the rupee and consequently inflation. This was sharply lower than the same period last fiscal year, when the current account registered a surplus.

Mint delves deeper to understand what caused the reduction in the current account deficit (CAD), whether it can be sustained, and the outlook for the full year.

The CAD for the first quarter of 2025-26 was $2.4 billion (0.2% of GDP) compared to $8.6 billion (0.9% of GDP) in the same period last fiscal year. The lower deficit, a welcome developmen...