New Delhi:The Government today (Dec 21, 2006) said the widening trade deficit is not a cause of concern as foreign exchange inflows from other sources are balancing it out.

"It does not matter at all," Finance Minister P Chidambaram said when asked whether the growing trade deficit was a cause of concern.

Yesterday, the government announced that the trade deficit in the first eight months of this fiscal has grown to 36.04 billion dollars, much higher than the 27.64 billion dollars in the same period last year.

He said the current account deficit is still under control and there was a fair increase in flow of capital and other invisibles like remittances by Indians abroad.

The Mid-Year Economic Review tabled in Parliament on Monday had also said:"it seems unlikely that the current level of such deficit would be a cause of alarm." "A moderate current account deficit is considered desirable in a capital-scarce developing economy to supplement domestic savings and support investment... It is difficult to be definitive about the sustainable level of current deficit," the review added.

Exports in the first eight months of the current fiscal, posted a 39 per cent year-on-year increase to 80 billion dollars.

Imports in the April-November period increased to 115.63 billion dollars during this period as against 84.7 billion dollars of the corresponding period in 2005.