Canada Posts April Trade Deficit

Canada, the world’s eighth-largest economy, recorded a deficit of C$179 million (USD$163 million) in April, after a revised surplus of C$1.01 billion in March, Statistics Canada said. The balance was forecast as a surplus narrowing to C$1 billion from an initially reported C$1.11 billion in March, according to the median response of 21 economists surveyed by Bloomberg.

Canada’s economy contracted at a 5.4% annual rate in the first quarter, the fastest pace since 1991, as the country’s businesses scaled back spending. The Bank of Canada kept its benchmark lending rate at a record 0.25% on June 4, and renewed a commitment to keep it there until June 2010.

Exports dropped 5.1% to C$30.8 billion in April, led by falling shipments of energy products such as natural gas. The decline was due mainly to a 3.2% drop in prices, while volumes fell 1.9%. Industrial goods and materials exports fell 9.7% on fewer sales of fertilizers and metals such as aluminum. Shipments of machinery and equipment, the largest export component, dropped 7% on fewer sales of aircraft and other transport equipment. Automotive exports increased 2.7%.

Imports fell 1.5% in April to C$31 billion on falling trade in industrial goods, the statistics agency said. Canada’s trade surplus with the U.S. narrowed to C$2.78 billion in April, from C$3.46 billion in March.