India’s December export to slip 3%: DBS

Trade deficit looms.

According to DBS, India’s export growth is projected at -3% YoY. Import growth, meanwhile, is at 0.7% YoY.

Here’s more from DBS:

The slowdown in China last year and the Eurozone crisis took a heavy toll on exports. Shipments to Europe are still down by over 30% in October, compared to the peak in May 2011 (prior to the intensification of the Eurozone crisis). The steady increase in shipments to China also took a pause as commodity prices slumped.

Meanwhile, export to the US stagnated for the whole of last year. Comparatively, imports have continued to surge as the economy embarked on investment-led growth, thereby leading to deteriorating external imbalances.

However, this is set to change this year. In the coming months, it is likely that the trade deficit will return to a surplus as commodity prices stage a moderate bounce. In the immediate term, however, the trade balance is likely to stay in negative territory.