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Charts & Analysis

Charts: Trade Balance Flat at $10.8 Bn, Rupee Depreciation Impact Vanishes

Export and Import growth slowed in August 2014, with the trade deficit nearly flat at $11 billion.

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The problem isn’t evident here. We aren’t growing total trade that much:

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and then, the year on year growth in both Exports and Imports have gone to below 3%.

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Given that the rupee was nearly at Rs. 68 last year in August, and we are at 60/61 today, we have seen the rupee appreciate. This will of course impact imports but remember that not every export contract will change immediately after the rupee falls drastically. It could take a few months before exports increase.

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While this is not good news, it’s strange that the impact of elections which should have set the economy up, is not really increasing. A slowing set of exports AND imports signifies a deeper problem. However these are early signs and if the situation has to get worse, that is at least two months away.

  • suman c says:

    As per a few prominent ‘conspiracy theorists’ US Govt and Fed is fudging economic data and Western economy is in tatters and US total Debt of 17Tn is beyond repayment. It’s only a matter of time the US consumption crumbles and the world economy goes down along with it. But then, those are conspiracy theories in official terms.