Tackle the inflows

Published By: Business Standard on eSS | Published Date: September, 18 , 2010

An issue that has attracted surprisingly little notice is the size and growth of the trade deficit. Even more worrisome is the flat trajectory for exports — which escapes notice because comparisons are with the corresponding month of a year earlier. But if one looks at the variations month-on-month, the loss of all momentum becomes obvious because exports from April to August have stayed constant at about $16 billion. Even the usual seasonal upswing after the summer slump is missing. In contrast, imports have been growing (hitting $29 billion in August), and the trade deficit, therefore, has grown from $10 billion in April to $13 billion in August — which makes for 30 per cent growth in four months. The full year could register a trade deficit of $150 billion. At 10 per cent of GDP, that would be the largest trade deficit in recent Indian history, and also the largest for any significant economy in the world.

Author(s): T.N. Ninan | Posted on: Sep 24, 2010 | Views(1427) | Download (205)

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