Export Dips By Half In December; Trade Deficit Widens

After reporting the CPI and IIP data last week with concerns being raised for the former at 5% for December and cheer for the factory output which reached 17-month high levels of 8% for November month , the government on Monday came up with WPI inflation number which stood at levels better than estimates at 3.58% for the December month.

Later came in the trade data which was both upbeat as the double digit growth was sustained in December too but worrying on the other end as it diminished by nearly half the level reached in the previous month.

The exports logged a growth of 12.4% in the December month and the agitation of exporters again surfaced in respect of export refunds. Industries across the export gamut expect to reach the target set for FY 2017-18 of $300 billion.

Industries that contributed to the fall include gems and jewellery, electronics, engineering, refinery products among others. Other deterring industry had been the agricultural sector.

On the other hand, import surged to 21.1% in December as against 19.6% in the previous monthly mainly due to surge in crude oil price and gold.

While, non-oil and non-gold import that represent industrial demand led to the cheer in IIP numbers for November month.

The trade deficit reached a three year high of $14.9 billion while for the current fiscal year it further ballooned to $114.9 billion. Nonetheless, services exports jump to a 15.4% level for November is likely to not produce any major impact on CAD and offset the trade deficit at the same time.

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