Canadian Current Account Gap Narrows In Q3

Canada current account gap narrowed CAD 0.7 billion to CAD 18.299 billion in the third quarter of 2016, following three straight quarterly increases.

The deficit on international trade in goods narrowed CAD 2.7 billion to CAD 8.3 billion, following a record gap of CAD 11.1 billion in the second quarter. Exports increased by CAD 5.9 billion to CAD 130.1 billion. It was the highest growth since the first quarter of 2014. mainly driven by energy products sales (+CAD 2.3 billion). In addition, exports of metal and non-metallic mineral products increased by CAD 1.0 billion, mostly from higher prices. Consumer goods were up CAD 0.7 billion on higher volumes, following a CAD 1.6 billion reduction in the second quarter. Total imports rose CAD 3.2 billion to CAD 138.4 billion. The largest increase was in industrial machinery, equipment and parts, up CAD 2.6 billion on higher volumes. Energy products and motor vehicles and parts also contributed to the gain, with both categories posting a CAD 0.5 billion rise in the quarter. In contrast, aircraft and other transportation equipment and parts fell CAD 1.4 billion on lower volumes, following a CAD 0.9 billion increase in the previous quarter.

On a geographical basis, the goods surplus with the United States increased CAD 3.1 billion to CAD 8.4 billion, led by stronger exports of energy products. In contrast, the deficit with non-US countries rose CAD 0.4 billion to CAD 16.8 billion, mostly reflecting a large import of industrial machinery, equipment and parts from South Korea destined for the Hebron offshore oil project in Newfoundland and Labrador.

The overall deficit on international trade in services edged down CAD 0.2 billion to CAD 5.3 billion in the third quarter. This was the sixth consecutive quarterly reduction in the services deficit, mostly led by a lower travel deficit. The travel deficit was down CAD 0.1 billion to CAD 3.5 billion, as non-residents increased their spending in Canada as a result of more visits. This was partially offset by larger payments made by Canadians travelling abroad. The travel deficit has diminished by CAD 1.3 billion since the first quarter of 2015.

The investment income deficit increased CAD 1.6 billion to CAD 3.5 billion. Profits earned by foreign direct investors on their Canadian assets were up CAD 1.4 billion, nearly returning to 2015 year-end levels. Meanwhile, profits earned by Canadian direct investors on their assets abroad were largely unchanged.
Payments on foreign holdings of Canadian securities increased CAD 0.3 billion, following a decline in the second quarter. Revenues from holdings of foreign securities were up by CAD 0.1 billion.

Canadian Current Account Gap Narrows In Q3

Statistics Canada | Yekaterina Guchshina |
11/29/2016 1:59:44 PM