Exports Surge 57% In May, Imports Increase 54.08%
In what could further ease pressure on the current account deficit, the country’s merchandise exports grew at 57% in May this year, a rate which many analysts called “unprecedented”. A sharp jump in exports of engineering and electronic goods, chemicals and pharmaceutucals and gems and jewellery pushed the exports despite the developed markets of Europe and the US being in torpor.
Exports stood at $25.94 billion in the month as compared to $16.52 billion in the corresponding month a year ago. A spurt in export of petroleum products also contributed to the jump.
The country’s imports also continued their growth momentum during the month in what indicated the robustness of the domestic economy despite mounting raw material prices and rising interest rates.
According to the commerce ministry’s data released on Friday, India’s imports grew 54.08% to $40.9 billion in May, which has left a trade deficit of $14.9 billion. “This is the highest imports figures in the last four years,” Rahul Khullar, commerce secretary, said.
The Reserve Bank of India data said on Thursday that the current account deficit narrowed to just 1.1% of the country’s gross domestic product in the fourth quarter of 2010-11. According to the RBI data, the country’s current account deficit for the January-March 2010-11 period stood at $5.4 billion as against $12.8 billion in the same period last year. For the whole of last fiscal, current account deficit stood at 2.6% of GDP as against 2.8% in the previous year.
Chief economist at research body Crisil DK Joshi told FE that the export numbers were “unprecedented”. He said the economy was showing signs of stability as was evident from the narrowing of current account deficit and healthy export numbers on a sustained basis, but there were still concerns stemming from a higher food inflation and possible moderation of GDP. “It’s getting difficult to connect the dots in the economy. In the longer run, it might not be possible to sustain the high growth numbers in exports,” Joshi said.
Earlier this week, Prime Minister Manmohan Singh in a meeting with a group of editors indicated that inflation would moderate to around 6-6.5% by March 2012 if oil prices reduce. He reportedly said, “I have reasons to believe if oil price soften and commodity prices remain where they are, we should be able to bring down inflation to 6.5% by end of March.”
In May, crude oil imports grew 18.57% to $10.1 billion from $8.5 billion in the corresponding month a year ago. The imports of non-oil products too grew significantly. It increased 71% to $30.7 billion in May from $17.9 billion in the same period previous year.
Cumulatively, exports in the first two months of the fiscal have shown a healthy growth of 45.28% to $49.7 billion, while imports jumped 33.3% to $73.7 billion. This has left a trade deficit of $24 billion during April-May. In the last fiscal, India’s total merchandise exports were worth $246 billion, registering a growth of 37.55%. The total import last year was $300 billion, which was down 21.6% comapared to the previous year. The trade deficit last fiscal was $104 billion.
Sensing an opportunity to push merchandise exports, the commerce ministry has set an aim to touch exports of $450 billion by 2014. “This is a sign of robust scenario... coupled with effective government initiative,” said president of Federation of Indian Exporters Organisation Ramu S Deora.
Source : financialexpress.com
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