In a pleasant surprise for Canada’s economy, the country reported a smaller than expected merchandise trade deficit of C$1.05 billion ($765 million) in April, according to data released on Thursday. This news comes as a breath of fresh air after analysts had forecast a higher deficit for the month.
The growth in exports outpaced imports, with total exports rising by 2.6% while imports increased by 1.1%. Energy products and unwrought gold were the primary contributors to the increase in exports, with energy products like natural gas and crude oil leading the way. However, the rise in exports of unwrought gold was mainly due to higher prices in the market.
Import growth, on the other hand, was led by cars, ships, and unwrought gold. The increase in motor vehicle and parts exports for the third consecutive month was buoyed by the import of sport utility vehicles and other light trucks from the United States. Additionally, the arrival of a ferry from China that will run between Newfoundland and Nova Scotia also contributed to the growth.
Overall, 8 of the 11 export product categories saw an increase in April, while 6 of the 11 import products also recorded growth.
The positive trade balance in April comes as a boon for Canada as the country looks to resume economic growth after a stall in March. The Bank of Canada’s recent decision to lower its key policy rate further underscores the need for sustained growth in the coming months.
