New Delhi [India], Dec 16 (ANI): Amid a significant increase in the export numbers for November, credit-rating body ICRA has noted that while the high growth comes as a relief following the contraction in the previous month, it partly reflects higher commodity prices as well as a favourable base effect.
"Despite the sharp expansion in merchandise exports in November 2017 as well as the year-on-year decline in gold imports, the trade deficit cooled only marginally relative to the USD 14 billion recorded in October 2017. Nevertheless, the trade deficit for November 2017 is in line with our expectations," said Aditi Nayar, Principal Economist at ICRA.
The export hike, as Aditi noted, is attributed to engineering goods, petroleum products, gems and jewelry, and chemicals. Also, the considerable uptick in merchandise imports in November 2017 was led by fuels such as petroleum, crude oil and coal, industrial inputs such as machinery and chemicals, as well as consumer items such as pearls, precious and semi precious stones and electronic goods, she said.
On the gold front, imports contracted on a YoY basis in November 2017, despite the festive and wedding season, given the buildup of substantial stocks over the last few months. However, the decline in gold imports was more than offset by the rise in pearls, precious and semi precious stones in November 2017, said Aditi.
Further, the healthy rise in services exports was outpaced by the expansion in services imports, leading to a marginal 0.3 percent YoY rise in the services surplus in October 2017.
"A seasonal decline in gold imports and completion of export orders prior to the quarter-end are likely to soften the merchandise trade deficit in December 2017, relative to the levels seen in the previous two months. However, elevated commodity prices suggest that the trade deficit may continue to print in double digits," said Nayyar.
Accordingly, ICRA expects the current account deficit to record a considerable YoY deterioration to USD 13-15 billion in Q3 FY2018 from USD 8 billion in Q3 FY2017, and USD 7 billion in Q2 FY2018.
The Ministry of Commerce and Industry on Friday revealed that exports during November 2017 exhibited high positive growth of 30.55 per cent in dollar terms, compared to the corresponding period last year. This is on the pattern of positive growth in exports in last thirteen months with a dip of 1.12 percent in October 2017 as compared to the same period last year.
Exports during November 2017 were valued at Rs. 1,69,912.50 crore as compared to Rs. 1,35,699.47 crore during November last year, thus registering a rise of 25.21 per cent.
On the imports front, during November 2017, the value reported was Rs. 2,59,612.29 crore, which is 14.73 per cent higher than the level of imports valued at Rs. 2,26288.21 crore in November last year.
Cumulative value of imports for the period April-November 2017-18 was Rs. 1,91,3047.30 crore Rs. 1,63,0199.71 crore, thus registering a positive growth of 17.35 per cent over the same period last year. (ANI)