Canada posted a larger-than-expected trade deficit of C$1.26 billion ($908 million) in September as a larger drop in imports failed to offset lower exports, data showed Tuesday.
The September data represents the country's seventh consecutive monthly trade deficit, mainly due to falling exports to major trading countries other than the United States, its main trading partner, Statistics Canada said.
Due to an ongoing digital transition at the Canada Border Services Agency – Contributions and Revenue Management, where Statscan obtains most of its business data, the September results include a greater use of estimates .
Analysts polled by Reuters had forecast a deficit of C$800 million and Statscan revised the August trade deficit upwards from C$1.1 billion to C$1.47 billion .
The largest impact on exports, which fell 0.1%, was due to a 5.4% decline in shipments of metallic and non-metallic mineral products, led by a 15.4% drop in category of unworked gold.
Lower prices for metals and energy products are behind the monthly decline in exports, with total prices of exported goods falling by 1.5%, according to Statscan, which adds that in terms of volume, exports increased by 1.4%.
Inbound deliveries decreased by 0.4% in September, but remained stable in volume. Imports of metallic and non-metallic mineral products fell 12.7% and contributed the most to the overall decline.
The drop in imports largely reflects weak demand in Canada, which has suffered from the impact of high interest rates, which were held at 5% for more than a year before the Bank of Canada begins to reduce them from June.
Since then, the Bank of Canada has reduced its key rate to 3.75% at its four consecutive meetings.
The Bank of Canada will announce its next monetary policy decision on December 11, with more than 45% of bets favoring a further 50 basis point cut.
Total exports were 63.88 billion Canadian dollars and imports were 65.14 billion Canadian dollars.
Canada's trade surplus with the United States, which accounts for more than three-quarters of its total exports, increased to C$8.29 billion in September from C$7.82 billion a month ago . Imports from the United States, which represent 60% of all Canadian imports, increased 0.8% month-on-month.
($1 = 1.3882 Canadian dollars)
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