Respite on trade deficit continues - Angel Broking

Provisional data released by the commerce ministry shows that India's trade deficit for July 2013 narrowed to USD12.3bn as compared to USD17.5bn in July 2012 and at similar level of USD12.2bn in the previous month. Exports witnessed a sharp recovery by reporting 11.6% growth, the highest level in 18 months, on the back of a 6.1% decline in July 2012. We believe that the sharp INR depreciation and low base support improvement in export growth going ahead as the external demand scenario also improves.

Imports reported 6.2% yoy decline during the month as compared to 0.4% degrowth in June 2013 owing to compression in both oil and non-oil imports. Gold imports soared in the month of April and May of 2013 coming in at an average of USD 7.3bn in each of the 2 months but as expected gold imports moderated during June 2013 to less than USD 2bn.

The trade deficit for April – July of 2013-14 is estimated at USD 62.4bn, higher than the deficit of USD 59.6bn during April – July of 2012-13.

Source : Equity Bulls

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