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Slowdown in Exports Drags Global Recovery
Dec 16, 2015

It is not just the corporate earnings! The story of economic recovery is not getting any support from the export data. As the chart of the day shows, exports have shown a consistent decline every month this year. In the month of November 2015, at 24.4% YoY, the decline was the steepest in past few years. Currency devaluations in export destinations and lackluster global demand continue to drag economic recovery. Considering that exports now account for around a fourth of GDP, this is indeed a matter of concern.

The only relief in this regard is a similar trend in imports that has kept fiscal deficit in check. But one must note that lower import bill has a lot to do with decline in oil prices. If oil prices go up, policy makers will face a tough time.

As per an article in Firstpost, currently, 50% of India's export goods focus only on Asian economies. This suggests how vulnerable the export based economy is and highlights the need for further diversification. To address that, the Government needs to clear structural bottlenecks in the Indian economy.

Data Source: Economic Times

This Chart Of The Day was published in The 5 Minute WrapUp - How to Navigate through Uncertainty and Discover Impenetrable Moats

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