Indian trade data released on Thursday pointed to the possibility of a more serious economic reversal than earlier assumed. Exports declined for the second straight month in November, a commerce ministry report said, confirming fears about shrinking global demand as recession spreads across developed economies. A slowdown in the pace of non-oil import growth showed that domestic demand may be contracting even as inflation decelerated to a 10-month low.
India’s economic growth is slowing dramatically after a credit crunch hurt companies’ investment plans, caused job losses and prompted consumers to abruptly start spending less.
Exports contracted by 9.9% in November, after declining by 12.1% in October. Significantly, growth in non-oil imports, which have been decelerating through the year, dropped to a new low for the year at 3.4%.
Falling exports, as also non-oil imports, indicate a worsening economic outlook, noted Biswajit Dhar, professor and head of the centre for WTO Studies at the Indian Institute of Foreign Trade. WTO is short for the World Trade Organization.
“Combine this with a slowdown in industrial production data and it clearly shows that we are deep into a downturn scenario,” Dhar said.
Demand for made-in-Asia goods has slumped across the region amid the deepening global economic slowdown. China’s exports in November fell 2.2%, the first decline in seven years. Singapore’s exports posted the biggest contraction in more than six years in the same month.
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