Exports dip

Exports contracted for the first time since 2009 due to poor demand from Europe and raised concerns of an industrial slowdown on the back of an only 2% rise in output in the eight core sectors. Latest data released by the commerce department estimated that exports fell 5.8% to $28.7 billion, although the annual target of $300 billion was exceeded. With oil prices pushing up the import bill by 32% to $488.6 billion in 2011-12, the trade deficit widened to nearly $185 billion from $118.6 billion in the previous year. While policymakers and economists have been worrying about the implications on current account deficit, the industry is more worried about dealing with a prolonged period of industrial slowdown. 
All core sectors, barring coal, showed little or no growth. Given that the eight industry segments — cement, coal, steel, electricity, fertilizer, oil, gas and refined petroleum products — have a near 40% weight, economists are predicting that industrial production will grow around 2% in March, although it has a tendency to surprise given the data volatility. The commerce ministry is predicting a tough year ahead for exports, especially with the US economy slowing down. Further, the poor increments are expected to affect consumer sentiment and may impact domestic demand. “