Canada’s energy, gold exports help narrow trade deficit in April

By Thomson Reuters Jun 6, 2024 | 7:39 AM

OTTAWA (Reuters) – Canada posted a smaller than expected merchandise trade deficit of C$1.05 billion ($765 million) in April, as energy and gold helped exports grow faster than imports, data showed on Thursday.

Analysts polled by Reuters had forecast a C$1.40 billion deficit in the month. March’s trade balance was downwardly revised to C$1.99 billion from a C$2.28 billion deficit reported initially.

Total exports rose 2.6% in April, while imports increased by 1.1%, Statistics Canada said. By volume, exports grew 1.7% and imports declined by 0.2%, indicating higher prices of traded goods.

The rise in exports was led by energy products and unwrought gold. Energy products including natural gas, crude oil and natural gas liquids increased, and were partly offset by the decline in exports of refined petroleum products and nuclear fuel, Statscan said. The increase in unwrought gold exports was primarily attributable to higher prices.

Canada’s economic growth is expected to resume in April after stalling in March, and mining, quarrying, and oil and gas extraction was among factors cited by Statscan in a GDP forecast for the month released last week.

Import growth was led by cars, ships and unwrought gold.

Motor vehicles and parts exports rose for a the third consecutive month, helped by imports of sport utility vehicles and other light trucks from the United States. Inbound delivery of ships, including a ferry from China that will run between Newfoundland and Nova Scotia, also helped, Statscan said.

Overall, 8 of the 11 export product categories rose in April, while 6 of the 11 import product recorded growth.

Service exports were essentially unchanged at C$16.9 billion in April, while imports of services rose 1.1% to C$18.0 billion, Statscan said.

On Wednesday, the Bank of Canada lowered its key policy rate for the first time in 4 years and said further cuts were possible if inflation – last measured at 2.7% – continues to edge towards the bank’s 2% target.

($1 = 1.3688 Canadian dollars)

(Reporting by Ismail Shakil in Ottawa; Editing by Dale Smith)