Canada’s Trade Deficit Exceeds Forecasts

Canada’s merchandise trade deficit widened for a third month in December, exceeding all economist forecasts, as imports led by energy reached a record high.  The deficit of C$1.66 billion ($1.50 billion) followed a November shortfall that was revised to C$1.53 billion from C$940 million, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg forecast a C$650 million deficit in December, based on the median of 18 forecasts.

Imports rose 1.2 percent to a record C$41.4 billion as energy shipments jumped 22.6 percent to C$3.95 billion, Statistics Canada said. Exports rose 0.9 percent to C$39.7 billion, as a 4.5 percent decline in energy was offset by gains that included a 19.5 percent rise in metal ores.

Canada’s dollar fell to four-year lows last month after the country’s central bank suggested it may cut its 1 percent policy interest rate because of weak exports and inflation. Bank of Canada Governor Stephen Poloz said an expected surge in foreign demand and business investment hasn’t materialized.


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