Canada Quarterly Current Account Deficit is Wider than Forecast

Canada’s current account deficit was wider than economists forecast in the second quarter.

The shortfall was C$17.4 billion (C$13.1 billion) from April to June, Statistics Canada said Monday in Ottawa, greater than the C$16.9 billion median of 11 estimates in a Bloomberg survey of economists.

Exports of automobiles and parts rose by C$1.1 billion and energy shipments by about C$600 million. There was a strong gain in shipments in June after trade deficits on goods in April and May, Statistics Canada said.

The current account, a broad measure of trade in goods, services and investment, swung to deficits in 2008 from a surplus of about C$10 billion as the global financial crisis took hold. Manufacturing shipments have been slow to recover since then, and this year the plunge in crude oil prices has triggered fresh weakness.

The agency revised its first quarter figure to a deficit of C$18.1 billion, from C$17.5 billion previously. That remains the second highest total on record. The agency attributed the change to a lower balance on investment income.

Canada’s central bank cut interest rates twice this year and swaps trading shows some investors are betting on another cut at the next decision on Sept. 9.

The economy’s health has also been a major theme on the campaign trail before an Oct. 19 election, with Prime Minister Stephen Harper saying a mix of tax cuts and free trade agreements have aided companies and job creation.

Statistics Canada reports economic growth data for the second quarter Tuesday. Economists surveyed by Bloomberg predict output contracted at a 1 percent annualized pace following a first quarter decline of 0.6 percent. Some economists say that the two quarters of falling GDP means Canada had a technical recession.

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