January 16, 2021 1:06:15 am
Merchandise exports inched up in December, for a second time since February 2020, while imports advanced for the first time in 10 months, suggesting a gradual return towards normalcy.
The quick estimate released by the Commerce Ministry on Friday shows exports rose 0.1 per cent on year to $27.15 billion in December, better than a 0.8 per cent contraction announced earlier.
Imports rose at a much faster pace of 7.6 per cent last December to $42.59 billion, inflating trade deficit to a 25-month high of $15.44 billion.
The rise in imports reflects a nascent revival of domestic demand, following the Covid-induced compression since March last year, as businesses go through a “reset” phase, taking advantage of the lifting of lockdown curbs.
However, as pointed out by analysts, some amount of pent-up demand for raw materials may also have contributed to the rise in imports, although it’s still an encouraging sign.
If inbound shipments continue to rise, import-sensitive exports, too, will get a boost but it will also mark a return to the usual high trade deficit trend.
The outbound shipment of core products (goods excluding petroleum and gems & jewellery), which reflects the economy’s competitiveness, grew 5.5 per cent in December, against a 0.4 per cent fall in the previous month. Similarly, core imports rose 8 per cent last month, compared with a 1.7 per cent fall in November.
Overall, merchandise exports is still down by 15.7 per cent up to December this fiscal, while imports shrunk by 29 per cent.
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