The country’s trade deficit touched an all-time high of $26.18 billion as imports expanded 57.88 per cent to $66.31 billion in June because of a doubling of oil imports and a spike in the inflow of coal, gold, electronic goods and chemicals.

The finance ministry has warned that the current account deficit will deteriorate in 2022-23 because of costlier imports and tepid exports on the merchandise account.

The CAD stood at 1.2 per cent of GDP in 2021-22. Exports in June grew 23.52 per cent to $40.13 billion propelled by items such as petroleum products, gems and jewellery, readymade garments and rice, according to the government data released on Thursday.

“With this, trade deficit in Q1FY23 stands at $70.8 billion compared with $31.4 billion in Q1FY22. On the positive side, global commodity prices have softened from their peaks which will help ease some burden on the external deficits,” Madan Sabnavis, chief economist, Bank of Baroda, said.

The monthly economic report of the finance ministry said: “Global prices have softened, as fears of recession have dampened prices somewhat. This would weaken inflationary pressures in India and rein in inflation.”

“If recession concerns do not lead to a sustained and meaningful reduction in the prices of food and energy commodities, India’s CAD (current account deficit) will deteriorate in 2022-23 on account of costlier imports and tepid exports on the merchandise account.”

FM on crypto

Finance minister Nirmala Sitharaman on Thursday said G20 should examine the feasibility of bringing non-financial assets such as crypto-currencies in the ambit of automatic exchange of information among nations to check evasion.

At the G20 Ministerial on Tax and Development in Bali, Sitharaman said investigations have shown that numerous layers of entities are set up by evaders to conceal their assets even though the automatic exchange of information framework provides for financial account information to various jurisdictions.