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* Canada exports up by 1.0 pct, imports down by 1.2 pct
* Imports drop to 15-month low, volumes also down
OTTAWA, Dec 11 (Reuters) - Canada's trade deficit shrank much more than expected for the second month in a row in October as imports fell to a 15-month low while exports increased, Statistics Canada data indicated on Tuesday.
The deficit fell to C$169 million ($171 million) from a revised C$1.01 billion in September compared to analysts' forecast of a C$1.20 billion shortfall.
Analysts note that falling imports are not a sign of a flourishing economy. The trade data confirm other figures which show Canada is only eking out moderate growth as exporters struggle to deal with weak international markets.
Exports grew by 1.0 percent on higher shipments of farm, fishing and intermediate food products as well as crop products such as soybeans. Volumes were up by 0.3 percent.
Imports dropped by 1.2 percent to C$38.28 billion, the lowest level since the C$37.58 billion recorded in July 2011 and 5.7 percent under the record high of C$40.60 billion in June 2012. Most sectors posted declines and volumes decreased by 1.8 percent.
Exports to the United States, which took 71.8 percent of all Canadian exports in October, dropped by 0.2 percent while imports grew by 1.6 percent. As a result, Canada's surplus with the United States dropped to C$2.77 billion from C$3.21 billion in September.