Mumbai, Dec. 29: Fuelled by a strong demand for crude, the country’s trade deficit for the July-September quarter this year widened to $17.9 billion compared with $13.2 billion in the second quarter of last year.

Releasing the balance of payment (BoP) figures for the quarter, the Reserve Bank said the current account deficit widened to $6.9 billion in the second quarter of this fiscal compared with $3.6 billion in the year-ago period.

The deficit accrued despite a $11 billion invisible surplus and is attributed mainly to oil imports, which clocked a 31 per cent increase in the second quarter.

“Oil imports reflected the impact of hardening price of the Indian basket of international crude, which rose to $66.8 per barrel from $49.3 in the corresponding quarter of the previous year,” the central bank said.

On a half-yearly basis (April-September 2006), the current account deficit widened to $11.7-billion from $7.2-billion in the previous corresponding period, again, primarily on account of higher oil imports.

On a BoP basis, trade deficit for the first half of 2006-07 increased to $35.1 billion from $27.1 billion last year.

Giving details, the RBI said in the second quarter of this fiscal, merchandise exports grew 22.2 per cent compared with 33.8 per cent in the previous corresponding year, the export deceleration being mainly on account of a slowdown in exports of manufactured goods.

A strong base effect combined with a decline in import of export-related items and gold and silver resulted in non-oil imports growing only at a modest 13.9 per cent compared with 43.1 per cent last year.

Invisible receipts registered a robust growth at 32.8 per cent in the second quarter, up from the previous corresponding period's $9,582 million to $11,005 million.

Accretion to foreign exchange reserves (excluding valuation) at $2.3 billion in the second quarter was lower than last year's $5.3 billion.

In the April-September 2006 period, merchandise exports were lower mainly due to deceleration in exports growth on account of a slowdown in exports of manufactured goods and decline in handicrafts, gems and jewellery, the RBI said.

Oil imports for the half-yearly period increased by 36.9 per cent with rise in crude oil imports reflecting elevated international oil prices besides volume growth.

“While average crude oil price recorded a year on year increase of 25 per cent during April-September 2006, volume growth was 11 per cent,” the apex bank stated.

Average price of the Indian basket of international crude rose to $67.2 per barrel from the previous corresponding period's $53.7.

A steady growth in transportation, software exports, other professional and business services and remittances from overseas Indians fuelled growth in invisible receipts by 28.6 per cent.

Remittances from overseas Indians rose marginally at $11.2 billion compared with $10.5 billion last year.