Canada's current account gap widens in second quarter

Thu Aug 29, 2013 8:40am EDT
 
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OTTAWA (Reuters) - Canada's current account deficit widened in the second quarter as exports struggled to gain traction and lower oil shipments to the United States caused the bilateral trade surplus to shrink, according to Statistics Canada data on Thursday.

The deficit increased to C$14.6 billion ($13.9 billion) in the quarter, matching the average forecast of analysts in a Reuters poll.

The gap had narrowed in the previous two quarters and had stood at C$13.4 billion at the end of March, revised from C$14.1 billion previously.

The deficit on trade in goods expanded to C$3.1 billion in the April-June period. Imports outpaced exports, advancing C$1.4 billion on higher volumes of vehicles and electronic and electrical equipment.

Exports grew by a milder C$200 million as a drop in crude oil exports to the United States offset gains in other sectors. The surplus with the country's top trade partner fell during the quarter to C$10.2 billion from C$10.9 billion in the first quarter.

Canada's deficit on trade in services also widened slightly to C$6.2 billion, and the investment income deficit grew to C$4.2 billion.

The export sector, a key driver of the economy, has been hit by weak markets and, until recently, a strong Canadian dollar. Statscan's merchandise trade figures, reported earlier this month, showed the cumulative trade deficit for the first half of the year was the second highest on record.

($1=$1.05 Canadian)

(Reporting by Louise Egan and Alex Paterson; Editing by Chizu Nomiyama)