Energy sector-led exports have risen faster than the imports in Canada, statistics showing that the country’s merchandise trade deficit shrank to $3.2 billion in March as compared to $3.4 billion in February.
The Ottawa-based research reflected showed the export jump offset a 2.5 percent rise in imports, which is the reason for narrowing down the nation’s trade deficit.
In a report by CIBC economist Royce Mendes, it stated, “The headline trade deficit looked ugly in March, but the details were at least slightly prettier,” referring to the oil production restraint in Alberta. He added, “But, even outside of that sector, growth in outbound shipments has been sluggish in recent years, suggesting the need for a weaker Canadian dollar over the medium-term to increase Canada’s international competitiveness.”
Yet, despite the improvement for March, the country is still experiencing its biggest quarterly trade deficit in almost three years. The current number masks the downward revisions from the two months prior, with nearly $900 million in exports wiped away, which is a major reason that the national bank expects no economic growth in the beginning of the year.
There were nine different categories that reflected export gains, according to Statistics Canada, including higher crude oil production. The growth of energy products rose to 7.7 percent, while motor vehicles and parts gained 5.6 percent.
On the other hand, Canada’s trade surplus with United States President Donald Trump’s administration increased to $3.6 billion in March compared to just $3 billion in February.