0

0

0

0

0

0

0

0

0

economy | IST

Trade deficit widens in October: Here's what experts have to say

India's exports rose by 17.86 percent to $26.98 billion in October mainly due to the low base effect even as trade deficit widened to $17.13 billion, according to the commerce ministry data.
The exports on monthly basis were down compared to $27.95 billion in September.
Imports during October also rose by 17.62 percent to $44.11 billion, leading to widening of trade deficit to $17.13 billion.
The deficit widened despite a steep decline of 42.9 percent in gold imports to $1.68 billion during the month under review.
The trade gap was $14.61 billion in October 2017.
CNBC-TV18 caught up with Rupa Rege Nitsure, chief economist at L&T Finance Services, and Anubhuti Sahay, head of South Asia economic research at Standard Chartered Bank to decode the data.
Rupa Nitsure said trade deficit may get a bit lower because on the oil front it has now collapsed to below $70 per barrel from $86 earlier.
"So, going forward at least the pressure of oil imports would be lesser," Nitsure said.
Exports have started responding because base effect also had played a role until last month and that is why there was a contraction in exports growth, Nitsure said adding that they have started growing decently.
"Exports response always comes with a lag but I think this is not going to stay at this level," she added.
"Current account deficit is not going to be very comfortable. It will be more than 2.5 percent of GDP because there also the size of GDP matters and I am not very optimistic on the growth front," Nitsure said.
Anubhuti Sahay said, "Trade deficit is much wider than our expectation of $15 billion. If you look at the breakdown, it clearly shows that the widening has happened just on the back of oil trade balance.
The other part is on non-oil, non-gold trade balance, last time when we saw a narrowing of trade deficit to $14 billion there was a fall in non-oil, non-gold trade balance, that has reversed back to trend, Sahay said.
"Going forward we think we are still likely to get a current account deficit of around 3 percent of GDP for the current financial year," Sahay added.
With inputs from PTI.