MUMBAI, Sept. 15 (Xinhua) -- India's trade deficit narrowed to 6.77 billion U.S. dollars in August compared to 13.86 billion U.S. dollars in the same month last year, but was up from the preceding month of July, as per the data released by the government on Tuesday.
The narrowing trade deficit was an outcome of imports, contracting by 26 percent to 29.47 billion U.S. dollars, while exports, which fell for the sixth straight month by 12.66 percent to 22.7 billion U.S. dollars.
"The sequential rise in the merchandise trade deficit to 6.8 billion U.S. dollars in August 2020 from 4.8 billion U.S. dollars in July 2020, was entirely driven by a surge in gold imports, reflecting pent-up demand as well as elevated prices," said Aditi Nayar, principal economist at ICRA, a domestic credit rating agency.
But for the spike in gold imports, the recovery in merchandise imports lost steam in August 2020.
"Based on the available trends, we expect the current account balance to post a surplus of 7-10 billion U.S. dollars in July-September quarter," Nayar said.
So far, India's trade deficit in the current fiscal from April to August stood at 20.75 billion U.S. dollars compared to 77.25 billion U.S. dollars in the same period last year. Enditem