Exports grow 16.8%; merchandise trade deficit hit fresh high in June

Merchandise trade deficit hit a fresh high of $25.63 billion in June, as per preliminary trade data, surpassing the previous record of $ 24.3 billion in May this year.

Exports grew at 16.8% year on year in June to almost $38 billion, but imports surged sharply by over 51% to $63.6 billion.

The rise in imports was led by Coal, up almost 242%, followed by gold imports that grew over 169% to more than $2.6 billion and petroleum which saw a 94.2% uptick.

The value of non-petroleum imports was $42.84 billion in June, reflecting a growth of 36.36%, while non-oil and non-gold, silver and Precious metals imports were $36.7 billion, up 31.71% from a year ago.

“Despite an expected fall in the gold imports, the merchandise trade deficit widened further to a worrying $25.6 billion in June, with a sequential dip in exports and a rise in the non gold imports relative to May 2022,” said ICRA chief economist Aditi Nayar.

“With a steady uptick in the size of the merchandise trade deficit over the course of the quarter, we expect the current account deficit to more than double to $30 billion in Q1 of 2022-23, from the modest $13 billion in the previous quarter,” she said.