18-Jun-2013
CHENNAI: India's merchandise import growth slowed down to 7% in May (year on year) from 11% in April. While imports showed some signs of easing, exports painted a dismal picture, falling 1.1% year on year in May.
"As a result, trade deficit for the month widened to $ 2.1 billion, up 18.8% year on year," ratings agency CRISIL said in a recent report.
During May, high import growth was driven by a pick-up in non-oil imports which grew by 9.1%. "Strong growth in non-oil imports, given the significant slowdown in domestic demand for capital and consumption goods imports, hints at rising imports of other commodities, in particular gold," CRISIL said.
At the same time, oil imports continued to decline in May mirroring the softening of global crude oil prices. Oil import growth fell 3% year on year in May led by a 6.4% fall in crude oil prices compared to a year earlier.
High gold imports, which account for nearly 11% of India's total imports, have inflated the import bill. "An anticipation of further restrictions of gold imports and a decline in gold prices is likely to have driven demand for the metal in May," CRISIL said.
Restrictions on gold purchase were announced, twice in the last two months, to curb demand for the metal.
Source:-timesofindia.indiatimes.com
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