UPDATE 2-Canada Q4 current account gap widens, but less than forecast

Thu Feb 27, 2014 10:41am EST
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* Q4 deficit C$16.01 bln, forecast C$17.00 bln

* Q3 deficit revised to C$14.80 bln from C$15.47 bln

* Deficit in 2013 was second highest on record

* Lower crude prices main reason for higher Q4 deficit

By Randall Palmer and Leah Schnurr

OTTAWA/TORONTO, Feb 27 (Reuters) - Lower prices for crude oil helped to widen Canada's current account deficit to its fourth-largest level ever in the final months of last year, underlining economists' expectations that net exports were a drag on economic growth in the fourth quarter.

The gap widened to C$16.01 billion ($14.42 billion) in the fourth quarter of 2013, Statistics Canada said on Thursday. Still, the deficit was smaller than the C$17.00 billion analysts had forecast and previous deficits were revised lower.

Statscan said the increase in the deficit was mostly because of the trade in goods, with exports down C$876 million and imports up C$509 million. The biggest factor was a C$2.20 billion decline in crude oil exports, mainly because of lower prices.

The Canadian dollar came off its session lows immediately after the report, but the data was offset by investor caution over political tensions in Ukraine, which weighed on the currency.   Continued...