Canada trade deficit hits record
OTTAWA/TORONTO (Reuters) – Canada racked up a record trade deficit in December as the value of exports slumped the most in more than a decade because of lower crude oil prices, boosting the case for the central bank to move cautiously on raising interest rates further.
The deficit widened to $4.59 billion (US$3.43 billion) in December as the value of exports slumped by the most in more than 11 years as a result of weak crude prices, Statistics Canada said on Wednesday.
That was much wider than the $2.80 billion shortfall predicted by analysts in a Reuters poll, and exceeded the previous record gap, $3.99 billion, in September 2016.
“A lot of the softening looks like it can be traced back to disruptions in the energy sector and oil prices, so there is still some reason to think that there are transitory factors at play that will ease going forward,” said Nathan Janzen, senior economist at Royal Bank of Canada.
“If you are the Bank of Canada, it is yet another reason to move off to the sidelines in terms of the rate hiking cycle.”