Business | Economy
India's exports grow slowest in 14 months
India's exports grew at the slowest pace in 14 months in May as weakening global expansion hurt shipments of clothes, steel and electronic goods.
- Bloomberg
- Published: 00:08 July 2, 2008
New Delhi: India's exports grew at the slowest pace in 14 months in May as weakening global expansion hurt shipments of clothes, steel and electronic goods.
Overseas sales rose 13 per cent from a year earlier to $13.8 billion, slower than April's 31.5 per cent gain, the government said in a statement in New Delhi yesterday. Imports increased 27 per cent to $24.5 billion, widening the trade deficit to a record $10.76 billion.
Shipments are likely to slow this year as the fastest price gains in more than 13 years prompted Prime Minister Manmohan Singh to ban shipments of some food products and other commodities to contain inflation. A slowdown in the US and other developed countries is hurting exports across the region.
"The biggest challenge to the external sector this year is slowing global demand and rising oil prices," said Sonal Varma, a Mumbai-based economist at Lehman Brothers Inc. "We expect export growth to moderate."
Weaker demand
Global trade growth is likely to drop in 2008 after slowing to 5.5 per cent in 2007 due to weaker demand in Europe and Japan, expectations of a recession in the US and faster inflation, according to the World Trade Organisation (WTO).
South Korea's export growth cooled in June to 17 per cent from a year earlier, less than the 26.7 per cent gain in the previous month, according to figures released yesterday. Hong Kong's overseas sales expanded at a slower pace of 10.3 per cent in May.
The share of the US in India's total exports declined to 13.3 per cent in the ten months to January, compared with 15.1 per cent in the year-ago period, according to the latest breakdown of overseas sales released by the central bank. India gives a more detailed analysis of exports five months after releasing initial data.
Shipments to European Union and Asian developing countries accelerated while exports to members of the Organisation of Petroleum Exporting Countries (Opec) and Latin American nations moderated, the central bank said.
Exports of steel items declined 2.1 per cent in the ten months to January, compared with a 51.4 per cent gain in the year-ago period, the central bank said in a report.
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