Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
LATEST NEWS UPDATES | Mixed Signals from the External Sector -CP Chandrasekhar

Mixed Signals from the External Sector -CP Chandrasekhar

Share this article Share this article
published Published on Oct 7, 2017   modified Modified on Oct 7, 2017
-NetworkIdeas.org

A slew of numbers releasedrecently point to rather peculiar and contrary trends in India’s balance of payments. Exports have revived but the trade and current account deficits widen, pointing to an excess of foreign exchange expenditure relative to earnings. While the widening current account deficit points to a weakening balance of payments position, foreign exchange reserves are at record levels. The foreign exchange reserve increase is funded largely by capital flows, consisting of a very large share of investments in the debt market. Such large capital inflows are strengthening the rupee and undermining export competitiveness, which can worsen the current account position and create a vicious circle. Yet, since the increase in external debt is treated as “portfolio investment”, the similarities of the current situation to that before the debt-driven balance of payments crisis of 1991 are being ignored. And for those who want to talk up the balance of payments, there is no shortage of comforting evidence.

The most encouraging trend relates to the rate of growth of dollar value of exports calculated relative to the corresponding month of the previous year. That figure has been consistently positive over the 12 months ending August 2017, which is a major improvement when compared with the evidence that exports were declining for 18 months in a row till May 2016. So, there is cause for celebration.

But a close look at the numbers revealsthat there is also much cause for concern. India’s trade deficit is widening significantly. As compared with a deficit of $23.8 billion during April-June 2016, the deficit has risen to $41.2 billion during April-June 2017 or by 73 per cent over a year. This even though over these three-month periods exports rose from $66.6 billion in 2016 to $73.7 billion in 2017. The trade deficit has widened not because exportsare doing badly but because of a steep increase in the import bill from$90.5 billion during April-June 2016 to $114.9 billion during the corresponding period of the current year.

Please click here to read more.
 

NetworkIdeas.org, 29 September, 2017, http://www.networkideas.org/news-analysis/2017/09/mixed-signals-from-the-external-sector/


Related Articles

 

Write Comments

Your email address will not be published. Required fields are marked *

*

Video Archives

Archives

share on Facebook
Twitter
RSS
Feedback
Read Later

Contact Form

Please enter security code
      Close