Canada’s current account deficit narrowed in the third quarter of 2011.
Figures released Tuesday by Statistics Canada showed the deficit was smaller by $4.0 billion to $12.1 billion, retracing a sizeable component of the $5.8-billion widening to an upwardly revised $16.1 billion deficit (previously was $15.3 billion) in the second quarter.
A report from RBC Economics said market expectations going into Tuesday’s report were for a smaller $11.1-billion deficit in Q3. The improvement in the third quarter was largely accounted for by a solid $4.2-billion rebound in the merchandise trade balance that retraced much of the $4.9 billion drop in the second quarter.
What's more, the bank said, "the improvement in the goods balance in Q3 reflected a solid $4.7-billion rebound in exports that more than retraced a $0.7-billion drop in the second quarter. Goods imports were up a comparatively modest $0.4 billion following the $4.2 billion second quarter increase."
Canada's biggest bank also pointed to the services deficit, which narrowed by a modest $0.2 billion, although from an upwardly revised $6.5 billion (previously was $6.2 billion) deficit in the second quarter. The investment income deficit climbed by $0.4 billion to $5.9 billion from an upwardly revised $5.5 billion (was $4.7 billion) in the second quarter.
The transfers balance was unchanged in the third quarter at negative $0.6 billion.
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