OTTAWA: Canada’s merchandise trade deficit narrowed to $1.7 billion in September, in a sign that the low Canadian dollar may be improving the trade balance.
That compares to a deficit of $2.7 billion in August, Statistics Canada reported Wednesday.
The improvement in September came from exports increasing by 0.7 per cent by volume to total $44.5 billion and imports decreasing in volume by 2.1 per cent to $46.2 billion.
Royal Bank economist Paul Ferley says the weak Canadian dollar contributed to both declining imports and strengthening exports in the third quarter.
“Today’s report indicated that export volumes in the third quarter of 2015 are up a very strong 11.1 per cent [annualized rate], benefitting from the robust gains in earlier months. In contrast, imports fell by 3.1 per cent in the quarter,” he said in a note to clients.
Economists have been waiting for a lower dollar to have the desired effect of boosting exports and that may finally be happening.
Ferley estimates exports will add three percentage points to third-quarter annualized GDP growth.
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