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Merchandise exports continued its rapid growth, increasing 43.8% yoy in March, after a 49.7% yoy rise in
February. On a sequential basis, exports grew 15.8% qoq compared to 19.4% qoq growth in the previous month.
Sequentially, merchandise imports also grew rapidly, expanding by 26.6% qoq in March, from 22.6% qoq in
February, driven by both oil and non-oil imports. Non-oil imports increased 27.7% qoq, suggesting robust
domestic demand. Oil imports growth rose to 14.1% qoq from 8.5% qoq in February, reflecting higher oil prices.
The trade deficit narrowed to US$5.6 billion in March from US$8.1 billion in February due to stronger
exports.
The trade deficit for FY11 is estimated at US$105 billion compared to US$110 billion in FY10. Total exports
for FY11 rose significantly to US$246 billion against US$179 billion in the previous fiscal year. Total imports rose to
US$351 billion compared to US$288 billion in FY10.
The better export data is a positive sign for the current account. We have recently revised down our current
account deficit forecast for FY12 to 3.4% of GDP from 4.3% earlier. We do think that the import bill will increasingly
reflect higher oil prices. Therefore, despite some near-term tailwinds, we continue to expect depreciation in the INR
on 3-12 month horizons due to a challenging macro environment putting pressure on capital inflows. Our 3, 6 and
12-month USD/INR forecasts remain at 46, 46.2 and 47.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Merchandise exports continued its rapid growth, increasing 43.8% yoy in March, after a 49.7% yoy rise in
February. On a sequential basis, exports grew 15.8% qoq compared to 19.4% qoq growth in the previous month.
Sequentially, merchandise imports also grew rapidly, expanding by 26.6% qoq in March, from 22.6% qoq in
February, driven by both oil and non-oil imports. Non-oil imports increased 27.7% qoq, suggesting robust
domestic demand. Oil imports growth rose to 14.1% qoq from 8.5% qoq in February, reflecting higher oil prices.
The trade deficit narrowed to US$5.6 billion in March from US$8.1 billion in February due to stronger
exports.
The trade deficit for FY11 is estimated at US$105 billion compared to US$110 billion in FY10. Total exports
for FY11 rose significantly to US$246 billion against US$179 billion in the previous fiscal year. Total imports rose to
US$351 billion compared to US$288 billion in FY10.
The better export data is a positive sign for the current account. We have recently revised down our current
account deficit forecast for FY12 to 3.4% of GDP from 4.3% earlier. We do think that the import bill will increasingly
reflect higher oil prices. Therefore, despite some near-term tailwinds, we continue to expect depreciation in the INR
on 3-12 month horizons due to a challenging macro environment putting pressure on capital inflows. Our 3, 6 and
12-month USD/INR forecasts remain at 46, 46.2 and 47.
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