Canada’s merchandise trade deficit narrowed in May as gains in automobile and energy shipments brought exports toward the record set before the last recession. The C$152 million ($143 million) deficit reported by Statistics Canada today was smaller than the C$300 million median projection in a Bloomberg survey of 17 economists.
Canada has recorded just three trade surpluses since the start of 2012, underscoring Bank of Canada Governor Stephen Poloz’s disappointment with the exports he says are needed to complete an economic recovery. Output expanded by 0.1 percent in April, Ottawa-based Statistics Canada said this week, a result that fell short of economist forecasts.
“Poloz has mentioned an export wedge he would like to see filled,” Nick Exarhos, an economist at CIBC World Markets in Toronto, said in a telephone interview. Trade deficits and strength in Canada’s dollar will make Poloz “loathe to talk up rate hikes and drop his neutral stance” for the 1 percent policy interest rate at the July 16 announcement, he said.