Deficit Narrows to $18.3 Billion

CBJ — The current national account deficit narrowed in the third quarter after three consecutive quarterly increases as exports saw the highest growth in over two years.

Figures released by Statistics Canada reveal the deficit shrank to $18.3 billion from a downwardly revised $19.02 billion in the second quarter, though that was short of economists’ expectations for a deficit of $16.8 billion.

The deficit on international trade in goods narrowed to $8.33 billion from $11.06 billion as exports outpaced imports. Exports, a key part of the Bank of Canada’s economic outlook, racked up the highest growth since the first quarter of 2014, increasing by $5.9 billion to $130.11 billion.

Energy products were the major contributor to export growth, benefiting from both higher prices and volumes.

The deficit on trade in services edged down to $5.29 billion, the sixth quarterly reduction in a row, helped by an increase in tourism. The central bank has recently highlighted the growing importance of services exports as the economy adjusts to the impact of lower oil prices.

Foreign investment in Canadian securities was C$33.62 billion, led by purchases of corporate bonds.