Canada’s trade deficit narrows to $1.7 billion in December

Friday, 05 February 2021 20:57:11 (GMT+3)   |   San Diego
       

According to Statistics Canada, in December, Canada's merchandise exports rose 1.5 percent, with energy product exports posting the largest increase. Imports fell 2.3 percent, mainly because of lower imports of consumer goods. As a result, Canada's merchandise trade deficit with the world narrowed from $3.6 billion in November to $1.7 billion in December, the lowest deficit since June 2020.

For the year 2020, Canada's trade deficit totaled $36.2 billion, more than double the deficit observed in 2019. Total merchandise exports fell 12.3 percent in 2020, while imports were down 8.6 percent. By comparison, during the last major economic downturn, in 2009, annual merchandise exports dropped 24.6 percent and imports fell 15.7 percent.

Total exports rose 1.5 percent to $47.3 billion in December, with exports in 6 of the 11 product sections increasing. Non-energy exports edged up 0.1 percent. In real (or volume) terms, exports increased 0.5 percent.

Total imports fell 2.3 percent to $49.0 billion in December, the second consecutive monthly decline and the largest decrease since May. In real (or volume) terms, imports were down 1.5 percent.

In December, exports to countries other than the United States rose 1.6 percent to $13.9 billion, the seventh increase in eight months. Higher exports to China (iron ore and miscellaneous products) and Switzerland (refined gold and aircraft) were partially offset by lower exports to the United Kingdom (refined gold).

Imports from countries other than the United States fell 5.9 percent. This was the second consecutive monthly decline after five gains from June to October. Imports from Switzerland (pharmaceutical products) and China (cellphones) posted the largest declines. Canada's trade deficit with countries other than the United States narrowed from $5.8 billion in November to $4.4 billion in December.

In December, exports to the United States increased 1.5 percent, mainly on higher exports of energy products, while imports from the United States edged down 0.1 percent. As a result, Canada's trade surplus with the United States widened from $2.2 billion in November to $2.8 billion in December.

For the year 2020, exports to the United States dropped 15.6 percent compared with the previous year, while imports from the United States fell 11.0 percent. As for trade with countries other than the United States, exports fell 2.6 percent and imports were down 4.4 percent. The difference in the annual results for trade with the United States and with other countries is primarily because the two product sections hardest hit by the pandemic in 2020—motor vehicles and motor vehicle parts, as well as energy products—are mainly traded with the United States.


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