Canada Current Account Deficit Smallest Since 2008

Canada's current account gap narrowed by CAD 10.2 billion to CAD 6.4 billion in the second quarter of 2019 from a downwardly revised CAD 16.6 billion in the previous period and compared with market expectations of a CAD 9.8 billion shortfall. It was the smallest current account gap since Canada returned to a deficit position at the end of 2008, reflecting a much lower deficit on goods.

The goods deficit decreased by CAD 8.6 billion to CAD 0.3 billion, following a CAD 8.9 billion gap in the previous quarter. Total exports of goods increased by CAD 7.6 billion to CAD 154.1 billion in the prior quarter. Main contributors were energy products (CAD +3.4billion) on higher prices and volumes of crude petroleum, while motor vehicles and parts as well as farm, fishing and intermediate food products also contributed to the increase. Total imports of goods went down by CAD 1.0 billion, following a CAD 3.5 billion increase in the prior quarter. Imports of aircraft and other transport equipment and parts fell CAD 1.9 billion, almost completely offsetting the gain in the first quarter. Higher imports of motor vehicles and parts and energy products moderated the overall reduction in the quarter.

On the geographical basis, the goods surplus with the United States reached CAD 15.9 billion, the highest in over 10 years. Meantime, the goods deficit with non-US countries narrowed by CAD 2.9 billion, mainly on lower deficits with China, the Netherlands and Belgium.

The services deficit narrowed by CAD 0.7 billion to CAD 5.2 billion in the second quarter of 2019, the lowest level since the end of 2011. Exports of services were up by CAD 0.4 billion in the second quarter, while imports declined by CAD 0.3 billion. 

The deficit on primary income, which covers investment income on international assets and liabilities and compensation of employees, declined by CAD 0.9 billion to CAD 0.4 billion. Canada's investment income balance posted a first-ever surplus on the growth of profits earned by Canadian direct investors on their assets abroad.

Canada Current Account Deficit Smallest Since 2008

Statistics Canada | Rafael Gonzalez |
8/29/2019 1:43:56 PM