India: Narrower trade gap - ING
Prakash Sakpal, Economist at ING, notes that India’s external trade deficit surprisingly narrowed to $14.0 billion in September from $17.4 billion in August, despite a sharp slowdown in export growth to -2.1% YoY, the first negative print since March, from 19.2% growth in August.
Key Quotes
“But import growth also slowed to 10.5% from 25.4% on a broad-based slowdown in both oil and non-oil imports.”
“Oil imports have been falling on a month-on-month basis since July and the year-on-year growth rate has nearly halved to 34% over the same period despite firmer global crude price inflation of over 40% through September. However, after the recent spike in oil prices above $80 per barrel and with elevated geopolitical risk in gulf countries (Iran, Saudi Arabia) we anticipate no lasting relief on the trade deficit front.”
“The cumulative deficit of $94 billion in the first half of FY2018-19 was still $20.7 billion wider on the year, supporting our view of a widening of the current account deficit to 2.6% of GDP in the current financial year from 1.9% in the last.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
