Exports slump on strong currency as current a/c deficit rises to $5.5 bn
Current-account deficit in the three months through September (Q2) widened to $5.5 billion from the previous quarter?s $5.2 billion due to the rising imports, the Reserve Bank said Monday.
The deficit, the amount by which imports exceed exports, remittances and other income from abroad, however, remained lower when compared with the previous year?s Q2 figure of $6.3 billion .
On the Balance of Payments (BoP) basis, Q2 merchandise exports grew 19% as against the previous year?s Q2 of 27.4%.
Import payments registered 22.6% in the same period as against an increase of 26.5% of the previous year?s Q2 level.
The overall fall in exports, according to data released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), was mainly due to the decline in exports of textiles and textile products coupled with the slowdown in exports of agricultural products, engineering goods and chemicals.
According to the data released by the DGCI&S, although non-oil imports were higher by 25.3% in Q2 of 2007-08 (18.1% previous year) led by imports of capital goods and gold and silver, the total import growth was, however, lower due to deceleration in oil imports.
Following the deceleration in export growth and higher non-oil imports, trade deficit on BoP basis was higher at $21.7 billion in Q2 of 2007-08 ($16.8 billion).
Net portfolio investments, at $10.9 billion in the second half of the current year ($2.2 billion ) was the largest component of capital flows.
Major components of capital inflows include, portfolio flows, external commercial borrowing, banking capital and short-term credits.
