India’s merchandise trade deficit offered a sigh of relief as it eased to USD 20.1 bn in Jun-23 from a 5-month high of USD 22.0 bn in May-23.
Download ReportQuantEco Research || Jun-23 Merchandise Trade - Offers a sigh of relief
For the month of Jun-23, while both exports and imports recorded a sequential contraction, the drop in the trade deficit was led by a relatively faster contraction in imports vis-à-vis exports. At a granular level, the correction in trade deficit was predominantly led by core item of Ores & minerals. Non-core trade deficit, eased only marginally (USD 0.5 bn) as a sharp increase in net deficit for Gems and Jewellery (USD 2.2 bn) was more than offset by an improvement in that for Petroleum goods. Having said so, we continue to maintain our current account deficit forecast for FY24 at USD 53 bn (1.4% of GDP), down USD 67 bn (2.0% of GDP) in FY23. Lower commodity prices coupled with expectation of moderation in real activity in FY24 are seen to be the primary reasons for expecting a moderation in the current account deficit.