Macroeconomic Forecast India

The latest trade statistics showed India's trade deficit narrowing in November from the record high seen in the previous month. The monthly deficit fell to US$13.6bn from US$19.6bn in October. Export growth fell for the fourth consecutive month to 3.9% y-o-y from 81.8% in July, with earnings coming in at US$22.3bn. Meanwhile, import growth increased for the second straight month (to 24.5% y-o-y) as the import bill totalled US$35.9bn in November. This has been in conjunction with the recent acceleration of oil import growth. November's data poses upside risk on our end-FY2011/12 (April-March) deficit projection of US$145.6bn.

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