OTTAWA (Reuters) - The Canadian government said on Wednesday that the country’s first trade deficit in almost 33 years was predictable, given the world economic crisis, but said it was worried by the sharp drop in exports.
Canada posted a trade deficit of C$460 million ($368 million) in December as exports -- particularly oil and gas -- fell at a far faster rate than imports.
“It’s predictable when we’re in a worldwide downturn ... and some of our major purchasers -- the United States, China -- are going through very difficult times and therefore they’re buying less,” Trade Minister Stockwell Day told reporters.
“We are concerned that we have seen a reduction in exports,” he said.
Exports to the United States -- which takes around 75 percent of all Canada’s exports -- fell by 10 percent in December. Day said it was hard to predict whether Canada would now see a string of trade deficits.
“If the United States continues to stay in the doldrums and if China’s economy continues to move downwards, that means there will be less demand for Canadian products,” he said.
Reporting by David Ljunggren; editing by Rob Wilson