Economic recovery likely to have taken hold in Sep qtr: Morgan

Continued strength in import growth is a reflection of healthy underlying demand trend and an indication that growth recovery is expected to have taken hold in the September quarter, says a Morgan Stanley report.

According to the global financial services major, global economic growth is expected to stay positive and accordingly exports are likely to remain supportive going ahead.

Supportive export growth “coupled with robust consumption trends, we now have a clear runway for growth and expect that recovery should have taken hold in the September quarter,” Morgan Stanley said in a research note.

India’s export soared by 25.67 per cent to USD 28.61 billion in September, logging its highest growth in last six months, while import too rose by 18.09 per cent to USD 37.6 billion in September from USD 31.83 billion in the year-ago month.

“The sharp improvement in export growth was even stronger than what we and the consensus expected,” the report said, adding that the uptick was fairly broad based, with strength in oil and non-commodity exports, while non-oil commodity exports held up well.

The report noted that the continued strength in import growth is a reflection that underlying demand trends stayed healthy in the month. Robust sales of passenger cars, two wheelers and medium and heavy commercial vehicles, also supported this view.

The report further noted that the GST Council recently approved a package of measures to relieve some procedural requirements for exporters, and this in turn has alleviated some of the earlier concerns on the impact that GST implementation could have had on exports.