Canada’s current account deficit widened in the second quarter as the trade surplus with the U.S. shrank, government figures showed Monday.
Payments sent abroad exceeded receipts from outside Canada by $11 billion in the April-June period, the seventh straight quarterly deficit, Statistics Canada said today in Ottawa. Economists predicted a $10.7 billion second-quarter deficit, according to the median of 15 estimates taken by Bloomberg News.
Trade will subtract 1.6 percentage points from Canada’s economic growth rate this year, the Bank of Canada predicts. The economy will grow 3.5% as consumption and government spending lead a recovery from a recession last year led by falling U.S. orders for lumber and automobiles.
Canada recorded a $1.28-billion deficit in traded goods in the second quarter, compared with a $1.17-billion surplus in the prior three-month period, Statistics Canada said today. Goods exports rose $1.2 billion to $100.9 billion on higher shipments of automotive products, and imports gained $3.7 billion to $102.2 billion.
The deficit in services trade widened to $5.57 billion in the quarter from $5.26 billion, Statistics Canada said, and the deficit in investment income narrowed to $3.46 billion from $4.33 billion.
The nation's number crunchers increased their estimate of the first-quarter gap to $8.46 billion from an initially reported $7.82 billion. The current-account deficit reached a record $13.8 billion in the third quarter of 2009.
The current account is the broadest measure of international trade. The flow of money coming into or leaving Canada suggests changes in demand for the Canadian dollar.
Statistics Canada will probably report Aug. 31 that the economy grew at a 2.5% annualized pace in the second quarter, according to the median forecast of 18 economists surveyed by Bloomberg News. Bank of Canada Governor Mark Carney may raise his key lending rate on Sept. 8 by one-quarter point for a third time since June, to 1%, a majority of economists forecast.
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