Merchandise trade deficit and services trade surplus to touch record high in Q3
The merchandise exports shrank 3.9 per cent on a year-on-year basis and were down sequentially to a 12-quarter low of $103 billion in Q2 FY25
Chennai: In the December quarter, Indian trade will see both merchandise trade deficit and services trade surplus touching record high levels. The goods trade deficit is likely to touch a record high of $80 billion while services trade surplus too could register a fresh high of around $49 billion in Q3 FY25.
The merchandise exports shrank 3.9 per cent on a year-on-year basis and were down sequentially to a 12-quarter low of $103 billion in Q2 FY25.
Merchandise imports, on the other hand, grew 4 per cent in Q2 FY25 and sequentially firmed up to an eight-quarter high of $177.1 billion.
Despite geopolitical uncertainty and high volatility, the global trading activity has been steering ahead steadily so far in FY25. The global trade grew 2.4 per cent in Q2 FY25, which was the fastest pace of growth in eight quarters.
The World Trade Organisation foresees a further strong pick up in global trading activity in the second half of 2024 on account of a favourable base effect.
In such a scenario, India Ratings expects the merchandise exports to increase 6.6 per cent to around $112 billion in Q3 FY25. The merchandise imports are expected to grow faster at 9.2 per cent to around $192 billion in Q3FY25. Overall, the goods trade deficit could touch a record high of $80 billion in Q3 FY25.
Global demand for services too has been sustaining the strong momentum. The global trade in commercial services grew at a robust 8 per cent yoy during April-June 2024 and India’s commercial services exports have been growing faster than the global average. The global services PMI also stood at 53.1 in October 2024, remaining in expansion for the past 22 months. Ind-Ra expects the services trade surplus to climb further to register a fresh high of around $49 billion in Q3 FY25, up 8.8 per cent yoy.