OTTAWA (Reuters) - Canada ran a near-record trade deficit of C$2.94 billion ($2.28 billion) in April as the economy continued to struggle with weak crude oil prices that have slashed the value of exports and curbed growth.
The deficit, announced by Statistics Canada on Friday, was the 20th in a row and greater than the C$2.45 billion shortfall forecast by analysts in a Reuters poll. March’s revised deficit of C$3.18 billion is the record.
The shortfall narrowed from the previous month as exports rose 1.5 percent from March on a slight recovery in oil prices and increased natural gas shipments to the United States. Volumes rose by 0.5 percent while prices grew by 1.1 percent.
Imports increased 0.9 percent on the month on aircraft and other transportation equipment.
“The volume increase in exports was slightly underwhelming and I think we will be downgrading what we are expecting out of April gross domestic product,” said Nick Exarhos, economist at CIBC Capital Markets.
Exarhos, speaking by phone, said he had initially been looking for a 0.3 percent boost in growth in April after the economy shrank by 0.2 percent in March.
Exports to the United States, which accounted for 74.8 percent of Canada’s global total in April, rose 2.3 percent while imports advanced by 3.0 percent.
As a result, Canada’s trade surplus with its neighbor to the south narrowed to C$1.57 billion from C$1.74 billion in March, the lowest surplus since December 1993.
The Canadian dollar shrugged off the data and climbed instead on disappointing U.S. jobs numbers, rising to C$1.2955 to the U.S. dollar, or 77.19 U.S. cents, after opening at C$1.3096, or 76.34 U.S. cents.
The Bank of Canada - which interest cut rates twice in 2015 to cushion against the oil price slump - last week said recent indicators suggest the United States would see a return to solid growth in 2016 despite weakness at the start of the year.
Exports are likely to slump in May, when a major wildfire in northern Alberta forced several oil sands facilities to temporarily shut down.
Exarhos said the U.S. Federal Reserve was likely to raise interest rates at least once this year, which would weaken the Canadian dollar. Such a move would also, in theory, boost exports.
Separately, Statscan said labor productivity of Canadian businesses grew by 0.4 percent in the first quarter of 2016 after recording no growth in the fourth quarter of 2015.
With additional reporting by Fergal Smith in Toronto; Editing by Alan Crosby