India’s Trade Deficit Widens in April as Oil Prices Surge
(Bloomberg) -- India’s trade deficit widened to a five-month high as rising crude prices raised the cost of imports.
The gap between exports and imports was $15.3 billion in April, compared with $10.9 billion in March and $13.7 billion a year ago, data released by the commerce ministry showed Wednesday. The deficit is wider than the $13.5 billion median estimate in a Bloomberg survey of 21 economists.
- Exports rose 0.6% from a year ago to $26.1 billion, compared with a 11% gain in March
- Imports rose 4.5% to $41.4 billion, against a 1.4% increase in the previous month
- While exports growth remained tepid amid a slowing global economy and renewed U.S.-China trade tensions, a sustained spike in prices of oil, India’s biggest import, risks worsening the nation’s current-account deficit, which was at 2.5% of gross domestic product in the quarter to December
- India imports nearly 80% of its oil needs and the International Energy Agency expects the South Asian nation’s energy demand to more than double by 2040, making it the single largest source of global growth
- The price of Indian basket of crude climbed to $70.69 a barrel as of Tuesday from $66.53 at the end of March
- Even so, slowing domestic economic activity may temper demand for oil products. A more than 30% surge in oil prices so far this year is seen likely to crimp fuel consumption and further damp consumer spending in Asia’s third-largest economy
- Oil imports rose 9.3% from a year earlier to $11.4 billion in April
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