UPDATE 1-Canada December trade deficit shrinks sharply as exports jump

Fri Feb 5, 2016 8:37am EST
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(Adds details of release, background)

OTTAWA Feb 5 (Reuters) - Canada's trade deficit unexpectedly shrank to C$585 million ($427 million) in December from C$1.59 billion in November as exports jumped by a healthy 3.9 percent, Statistics Canada data indicated on Friday.

Analysts polled by Reuters had forecast a deficit of C$2.2 billion. December marked the 16th consecutive monthly trade deficit, reflecting damage to the economy caused by slumping crude prices.

But low oil prices have also cut the value of the Canadian dollar, which means some exports are cheaper. Gains were widespread, with the aircraft and other transportation sector recording a 26.4 percent increase.

Imports grew 1.6 percent after three consecutive monthly decreases.

Exports to the United States, which accounted for 74.8 percent of Canada's global total in December, grew 2.9 percent while imports grew 1.3 percent. As a result, Canada's trade surplus with the United States swelled to C$3.19 billion from C$2.63 billion in November.

Canada posted a record C$23.32 billion trade deficit in 2015, largely due to the low price of oil and other commodities. In volume terms, exports grew 4.0 percent in 2015 while exports advanced by 1.1 percent.

($1=$1.37 Canadian)

(Reporting by David Ljunggren; Editing by Bernadette Baum)