MUFG’s Michael Wan reviews India’s March trade data, noting a smaller overall deficit helped by seasonal factors and lower gold and import prices. He emphasizes that details already show that India’s economic growth is being impacted by weaker imports of energy and oil, especially liquefied petroleum gas, and much lower exports to Saudi Arabia and the United Arab Emirates.

Trade data reveals the impact of conflict

“Meanwhile, India released trade data for March, which provided interesting reading on the impact of the Middle East conflict on the economy.”

“While the overall trade deficit narrowed to $20 billion, this was partly due to seasonal effects but also to lower gold prices and imports.”

“The details suggest a significant impact on India’s economic growth, which could be seen already in the first month, both as a result of lower imports of energy and crude oil, in particular liquefied petroleum gas, and exports to some Middle Eastern countries, for which we have significantly softened data.”

“Notably, India’s exports to Saudi Arabia declined by 46% year-on-year, while exports to the UAE declined by 62% year-on-year.”

(This article was created with the assist of an artificial intelligence tool and has been reviewed by an editor.)