OTTAWA: Canada’s merchandise trade deficit widened in August, exceeding even the most bearish forecast in a survey of economists as energy and consumer goods led the biggest drop in exports in more than three years.
The deficit expanded to $2.53-billion from July, Statistics Canada reported Tuesday from Ottawa. None of the 18 economists in a Bloomberg survey predicted the August deficit would be wider than $2-billion. The median forecast was for a $1.2-billion shortfall.
Exports fell 3.6 per cent to $44-billion, including a 20.9 per cent drop in crude oil and bitumen on lower prices. Consumer goods fell 8 per cent to $5.91-billion while the metals and non– metallic mineral category declined 9.7 per cent to $4.54-billion.
The report tempers other evidence the world’s 11th largest economy is in a strong rebound from the shock of lower oil prices that derailed output in the first half of the year. Exports started the third quarter with 2.4 per cent growth in July, and gross domestic product rose in June and July after five prior contractions.
The trade report “is negative for August GDP but it’s one month of data,” said Krishen Rangasamy, senior economist at National Bank Financial in Montreal. “Canada is going to return to growth in the third quarter.”
Canada’s dollar was little changed at $1.3077 per U.S. dollar at 9:52 a.m. Toronto time, and has weakened 11 per cent this year.
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