Business

Moody’s forecasts sharp drop in exports

NEW DELHI: Close on the heels of two consecutive months decline in exports, leading global credit rating agency Moody’s on Friday said that India’s exports were likely to show a ‘sharper slowdown’ in the next six months of the year.

“A sharper slowdown in exports is expected in the first half of 2009, putting more downward pressure on the trade balance,” Moody’s said. Exports, which have posted a robust 30.9 per cent growth in the initial six months of 2008-09, contracted by 12.1 per cent in October, for the first time in the last five years. The trend continued in November also, when exports fell to $11.5 billion from $12.7 billion a year ago, leaving a trade deficit of $10.1 billion, slightly lower than $10.5 billion a month ago.

The agency further said that imports would also fall during the first six months of 2009 on account of higher spending on infrastructure.

“Both imports and exports are expected to moderate further in the first half of 2009, but inbound shipments may slow down at a milder pace because of continued infrastructure development, especially in the lead up to the 2010 Commonwealth Games,” it said.

Imports in October 2008 had grown by 10.6 per cent but slipped to 6.1 per cent in the following month. During April-November exports were $119.3 billion. Similarly, it said India’s economy, which moderated from 7.9 per cent in the June quarter to 7.6 per cent in the September quarter would see a further downward movement.

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