Current Account Deficit Smaller in Q4

Canada's current account deficit (on a seasonally-adjusted basis) narrowed by $2.1 billion in the fourth quarter to $8.8 billion. The decrease mainly reflected a lower trade in goods deficit, as well as higher receipts from government transfers.

Figures released Thursday by Statistics Canada revealed that, for the full year 2019, the current account deficit stood at $45.4 billion, down $10.1 billion from 2018. The deficit in 2019 was the lowest since 2008, the last time Canada recorded a current account surplus.

In the financial account (which is to say, unadjusted for seasonal variation), inflows of funds from abroad to finance the current account deficit mainly came from transactions in currency and deposits. Overall, non-residents increased their holdings of currency and deposits in Canada by $73.9 billion in the fourth quarter.

Portfolio and direct investment activity both generated a net outflow of funds from the economy in the fourth quarter, led by higher direct and portfolio investment abroad in the quarter. Direct investment abroad exceeded direct investment in Canada in all quarters of 2019.