Trade surplus could be more a reason for alarm than rejoicing: Economists

They say the underlying cause could be a huge drop in demand, which is not good for economic growth

Economists are not enthused about the trade surplus in June, achieved for the first time in 18 years, as the underlying cause could be an alarming drop in demand — something that’s not good for economic growth.

The surplus is “certainly not something to rejoice about. Rather, it signals severe slowdown in economic activity weakening the demand for core imports — that is non-oil non-precious metals imports,” said Rupa Rege Nitsure, chief economist of L&T Finance Group.

“One can rejoice about trade surplus only if it is due to exports being higher than imports. In today’s circumstances, it is a negative rather