More figures out from Statistics Canada this morning showed that this country's books are far from balanced.
Canada’s current account deficit widened to $14.58 billion in Q2/13 from the revised $13.45 billion shortfall reported in Q1 (previous reported as a deficit of $14.09 billion). Market expectations going into today’s report were for a deficit of $14.8 billion in Q2.
The deterioration in the Q2 balance, which marked the first widening in the current account deficit since Q3/12, predominantly resulted from a $1.4-billion increase in the trade deficit which in turn reflected a higher deficit on trade in goods. Imports rose $1.4 billion to outpace the $0.2-billion gain in exports that was tempered by the $0.8 billion decline in energy exports due to lower traded volumes of crude petroleum.
The service deficit increased for the first time in a year, edging up by $0.2 billion to $6.2 billion in Q2. The primary income balance deteriorated by $0.2 billion; however, this widening was from a $4.5-billion deficit in Q1 that was considerably smaller than the previously reported $5.4-billion deficit.
The secondary income deficit declined by $0.5 billion in Q2, with Statistics Canada reporting that this reflected higher receipts from Canadian insurers on reinsurance services provided by foreign companies related to the flooding in Alberta in June.
According to experts at RBC Economics, "the deterioration in the trade balance is consistent with a slowing in Q2 GDP growth to a 1.7% annualized rate from the 2.5% rate recorded in Q1.
"However," concludes Canada's biggest bank, "the bigger negative factor is expected to the flooding in Alberta and the construction strike in Quebec, weighing on mining and non-residential construction in the quarter."
