Economy - Reports
Continued upward pressure likely on trade deficit says Finance Ministry As on : 25-Nov-24  15:01

A latest update from the Finance Ministry stated that going forward, there is likely to be continued upward pressure on the trade deficit, driven by a faster pace of import growth. Rising commodity prices, particularly for industrial inputs and metals, are expected to contribute to imported inflation and increase the import bill. Exports face greater uncertainties influenced by geopolitical risks and the modest monetary policy responses of major global central banks. On the external front, India's export recovery may encounter challenges due to softening demand in developed markets. However, trade in the services sector is sustaining momentum. Apart from the emerging indications of domestic growth and stability, the dynamics of global interest rates, earning growth and valuation, geopolitical developments and policy decisions of the next administration in the United States will determine the course of trade and capital flows. Recent developments in the ongoing conflict between Russia and Ukraine have caused some concern in financial markets with safe-haven assets such as US Treasuries and gold finding a bid. Geopolitical conditions remain fragile, the Ministry noted.

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