External Trade - Trade Deficit Widens, But Details Heartening :: Edelweiss PDF link

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->

September trade deficit came in at ~USD14.2bn, higher than USD10.8bn in August. The deterioration in trade deficit was primarily due to higher gold imports, wider oil deficit and increase in non-oil non-gold imports. Gold imports increased by ~USD1.8bn to ~USD3.8bn mainly due to the festive season. The deterioration in oil deficit could again be a one-off and reverse in ensuing months given correction in the global oil prices. The increase in non-oil and non-gold balance is a positive for the economy as it’s due to higher non-oil and non-gold imports, which reflects better domestic demand. Further, even the sequential exports momentum remains strong, and should be growth supportive.

Overall, the widening of trade deficit in September is mainly due to transient factors (festive season and higher oil deficit) and is not worrisome. If anything, the September data indicates signs of economic recovery. Going ahead, we expect the trade deficit to reduce to ~USD12-14bn range as the one-off factors fade. Hence, we see limited risks to our USD35-40bn FY15 CAD forecast.

LINK

https://www.edelweiss.in/research/External-Trade--Trade-Deficit-Widens,-But-Details-Heartening/27261.html