SLOWING EXPORT GROWTH

Thirteen months of growth in merchandise exports has given way to a dip in October. The value of exports during the month was $23.09 billion, 1.12 per cent lower than $23.36 billion in the same month last year. This is significant because of negative growth in only labour intensive sectors such as leather and leather products, gems and jewellery, handicrafts, readymade garments and carpets. These were the most hit by demonetisation and now GST and could indicate the need for remedial action. Another problem is that the fall in export growth is not accompanied by a fall in imports (to maintain the trade balance). Imports have risen – oil imports, in particular, were $ 9.28 billion, over 27 per cent higher than oil imports. Increasing trade deficit in a climate of increased oil import burden can never be healthy.