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December trade deficit widens, pressure on current account
January 10, 2014 / 6:14 AM / 4 years ago

December trade deficit widens, pressure on current account

NEW DELHI (Reuters) - India’s trade deficit widened in December on slowing export growth which could pose pressure on the country’s fragile current account balance.

A crow flies past a container ship docked at a port in Vallarpadam in Kochi December 11, 2013. REUTERS/Sivaram V/Files

But imports continued to fall, driven by curbs on gold, the country’s second most expensive overseas purchase after oil.

The trade deficit stood at $10.14 billion compared with $9.22 billion in November, a trade ministry official said on Friday.

Merchandise exports rose 3.49 percent year-on-year to $26.35 billion, slowing down from a 5.86 percent pace in November.

Imports fell 15.25 percent year-on-year to $36.49 billion led by a 68.83 percent year on year drop in gold and silver imports.

India’s Finance Minister P. Chidambaram has said he expects a current account deficit of less than $50 billion, compared with earlier estimates of $70 billion in the fiscal year ending March.

The shortfall was a record $87.8 billion in the previous 12-month period which had precipitated a record fall in the value of the rupee against the dollar last summer.

Reporting by Manoj Kumar; Editing by Sanjeev Miglani

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