India’s trade deficit widens in May as imports continue to climb

India’s trade deficit widened in May as imports continued to expand on the back of strong domestic demand.

The gap between exports and imports stood at $23.8 billion last month, Trade Ministry data showed Friday, higher than the $19.5 billion deficit forecast by economists in a Bloomberg survey. Exports grew 9.1% to $38.1 billion, while imports climbed 7.7% to $61.9 billion during the month. 

India’s economy expanded more than 8% in the fiscal year that ended in March, the fastest pace of any major nation in the world. Even so, global trade conditions remain uncertain with the World Bank projecting that 2024 will cap the worst half decade of trade growth since the 1990s.  

A widening trade deficit may put pressure on India’s current account and the rupee. The currency is down 0.4% against the dollar so far this year, among the best performers in Asia. 

©2024 Bloomberg L.P.