Canada’s Trade Surplus in July

By Fergal Smith

TORONTO (Reuters) – Canada reported a lower-than-expected trade surplus of C$684 million ($505 million) in July, as imports decreased more rapidly than exports. The trade balance for June was revised from a surplus to a deficit, according to Statistics Canada data released on Wednesday.

Exports fell by 0.4%, coming off a 4.7% increase in June, driven by declines in motor vehicles, parts, wheat, and canola. In volume terms, exports dropped by 1.5%.

“Export volumes were pretty weak across the board,” stated Stuart Bergman, chief economist at Export Development Canada. He noted that this fluctuation reflects the inconsistent economic recovery observed in the U.S., Canada’s major trading partner, which receives approximately 75% of Canadian exports.

Analysts surveyed by Reuters had anticipated a surplus of C$0.8 billion. The revised June report indicated a deficit of C$179 million instead of an initial surplus of C$638 million.

Imports fell by 1.7% from a record C$66.1 billion in June, attributed to decreases in motor vehicles, parts, and aircraft. Import volumes also declined by 2%.

“Higher interest rates and prices continue to hamper consumers,” Bergman added.

To aid the economy, the Bank of Canada has started lowering interest rates and is expected to announce further policy decisions at 9:45 a.m. ET (1345 GMT).

The Canadian dollar remained stable, trading at 1.3552 per U.S. dollar, equivalent to 73.79 U.S. cents.

($1=$1.3552 Canadian)