Statistics Canada reveals a broader than anticipated trade deficit of C$1.47 billion in January

on Mar 8, 2020
Updated: Mar 11, 2020
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  • Statistics Canada reveals a broader than anticipated trade deficit of C$1.47 billion in January.
  • Canada posts a 2.0% drop in exports in January that marked the widest decline since June 2019.
  • Imports dropped 0.5% in Canada in January with 6 out of 11 product sections recording a decline.

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Statistics Canada revealed its report on trade balance on Friday. The data suggested a broader than anticipated trade deficit in January at C$1.47 billion ($1.10 billion). The official data attributed the wider deficit to reduced exports of automobiles and relevant parts.

Analysts were expecting a much smaller deficit of C$830 million. Data for December was also revised on Friday to a trade deficit of C$732 million from C$370 million recorded earlier.

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Exports Dropped 2.0% In Canada In January

At C$48.14 billion, Canada’s exports saw a 2.0% decline in January that marked the widest drop since June 2019 when it was noted at 5.6%. Statistics Canada is known to track 11 product sections in which 9 posted a decline in January. Imports, on the other hand, printed a 0.5% drop in January as 6 out of a total of 11 product categories recorded declines.

In its statement on Friday, Statistics Canada reiterated that it closely monitoring how the Coronavirus outbreak can potentially affect the Canadian data for international trade. The health emergency, as per the agency, is particularly affecting Canada’s trade (both exports and imports) with China; a decline that reflected in January’s data.

Canada recorded a massive 7.8% decline in terms of exports to China in January. Potash, gold, and wood pulp contributed the most to weighing exports down. On the imports front, on the other hand, an even wider 12.1% decline was announced that was primarily attributed to sharply reduced imports of cellphones.

Motor Vehicles And Parts Posted The Widest Decline In Exports At 4.1%

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Overall, however, motor vehicles and relevant parts posted the broadest decline in exports at 4.1% ascribed to extended suspension of operations at manufacturing plants in China in an attempt to contain the virus spread. General Motor’s decision to close its Ontario plant also pushed the reading further down.

Reduced shipments of trucks and passenger cars also fueled a 1.7% decline in Canadian exports to the U.S. Subsequently, Canada registered a C$3.56 billion of trade surplus with the U.S in January that was branded the narrowest since February 2019.

On the imports front, consumer goods declined 6.3% in January ascribed to a 26.1% drop in imports of pharmaceuticals especially antivirals and drugs used for cancer treatment.

The Canadian dollar climbed from a low of 1.3379 to a daily high of 1.3438 against the greenback on Friday. The USD/CAD currency pair closed the last week at 1.3420 in the forex market.

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