Canada's Trade Deficit Widens on Surprise Export Decline

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The deficit on goods trade increased to Euro 4.9 billion from Euro 3.9 billion billion.

Canada's trade deficit in goods widened in May, from Can$1.9 billion ($1.45 billion) to Can$2.8 billion, as imports rose while exports edged down, the national statistical institute announced Friday.

The export drop drove the trade deficit to a wider than expected $2.8 billion, and will be seen as a disappointing result for a sector that had been showing signs of strength. "Year over year, total imports were up 3.5 per cent", said the federal agency.

Analysts in a Reuters poll had predicted a shortfall of C$2.05 billion. Imports rose 1.7 percent, driven by aircraft and other transportation equipment and energy products.

Exports slipped by 0.1 per cent as shipments of motor vehicle and parts fell, in part because of disruption in the supply of auto parts from a plant in the United States.

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Imports rose 1.7 per cent in May, after falling a month earlier.

Total non-US imports were Can$18.5 billion, with the largest increases coming from China, Belgium and Germany.

Imports from the United States rose one percent in May, totaling Can$32.6 billion, but exports to the U.S. edged down by 0.2 percent to Can$35.9 billion.

Statistics Canada noted that the rise was driven by the import of many airliners from the U.S. Energy products' imports also added to May's gain as a number of Canadian refiners were temporarily shut down in the month, causing higher imports to meet domestic demand for refined petroleum products.

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