Oil rout pushes trade shortfall to 10-month low
16/01/2015 12:13
India’s trade deficit shrank to the lowest level in ten months in December, narrowing 44 per cent from November as a slump in crude oil prices to the lowest level in five and a half years lowered the country’s import bill, overshadowing a contraction in overseas shipments, lifting the outlook for Asia’s third biggest economy.
The country posted a trade deficit of USD 9.43 billion in December, compared to USD 16.86 billion in November, government data showed on Friday.
Exports shrank 3.77 per cent to USD 25.4 billion in December 2014, year on year, reversing a 7.27 per cent uptick in November, a sign that a global slowdown amid Europe stagnation, Japan recession and China woes are sapping the appetite for overseas Indian shipments.
However, imports fell by 4.8 per cent to USD 34.8 billion in December 2014, year on year as the value of oil imports slumped by 28.6 per cent to USD 9.94 billion reflecting a slump in global crude prices.
A dip in oil prices is a boon for the Indian economy, given that the country relies on imported crude to meet 70 per cent of its consumption needs. A lower import bill owing to falling oil prices will cut the country’s current account gap and the fiscal deficit amid a diminished subsidy burden, reducing inflationary pressures, and paving the way for further interest rate cuts.
16/01/2015 12:13
India’s trade deficit shrank to the lowest level in ten months in December, narrowing 44 per cent from November as a slump in crude oil prices to the lowest level in five and a half years lowered the country’s import bill, overshadowing a contraction in overseas shipments, lifting the outlook for Asia’s third biggest economy.
The country posted a trade deficit of USD 9.43 billion in December, compared to USD 16.86 billion in November, government data showed on Friday.
Exports shrank 3.77 per cent to USD 25.4 billion in December 2014, year on year, reversing a 7.27 per cent uptick in November, a sign that a global slowdown amid Europe stagnation, Japan recession and China woes are sapping the appetite for overseas Indian shipments.
However, imports fell by 4.8 per cent to USD 34.8 billion in December 2014, year on year as the value of oil imports slumped by 28.6 per cent to USD 9.94 billion reflecting a slump in global crude prices.
A dip in oil prices is a boon for the Indian economy, given that the country relies on imported crude to meet 70 per cent of its consumption needs. A lower import bill owing to falling oil prices will cut the country’s current account gap and the fiscal deficit amid a diminished subsidy burden, reducing inflationary pressures, and paving the way for further interest rate cuts.
