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Growth in merchandise exports is expected to decline in coming months due to uncertainty in western markets adding to the woes of exporters hit by high interest rates and rising raw material costs, says a survey.
The survey, which was conducted among Ficci member associations and individual companies during August—September, said there are more negative expectations in the next six months.
Sixty—four per cent of the exporters felt that the current and future export conditions will continue to take a toll on their order book position, the survey said.
High cost of credit, rising cost of raw material and oil prices, tariff and non—tariff barriers and excess production capacity are major factors affecting exports growth, it said.
The survey said this sharp decline clearly indicates slowing down of the western economy has had an impact on export performance.
Growth in the country’s exports plummeted to 4.2 per cent year—on—year as the shipments aggregated $22.3 billion in November in the wake of difficult global situation, while imports were up 29.1 per cent to $35.9 billion.
The Reserve Bank in it its mid—quarter review of monetary policy today said, “Merchandise exports growth decelerated sharply to an average of 13.6 per cent year—on—year in October—November from an average of 40.6 per cent in the first half of 2011—12“.
However, as imports moderated less than exports, the trade deficit widened, putting pressure on the current account, RBI said.
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