- Andrew Skinner, head of Global Trade and Receivables Finance
Canada's current account widened in the first quarter to the second highest level on record amid worsening trade, particularly in the energy sector. The deficit widened to $17.5 billion in the beginning of the year, compared with the market's median forecast of $18.7 billion gap. The trade in goods deficit ballooned to a record $7.25-billion in the first quarter. Overall exports of goods dropped to $128.0-billion as the value of energy products declined $5.9-billion despite higher volumes, while imports of goods rose to $135.3 billion. The goods surplus with Canada's leading trading partner, the US, shrank to $6.1 billion, while the goods trade deficit with non-US countries widened to $13.3 billion.
Meanwhile, a separate report showed Canada's industrial product prices declined more than expected, while raw materials costs rose above estimates in April. Canada's Industrial Product Price Index dropped 0.9%, after climbing a downwardly revised 0.2%, according to Statistics Canada. The decrease in energy and petroleum prices was the main driver during the month, with prices plunging 3.2%. Excluding energy, IPPI was down 0.6%, the first decline since May 2014. The losses were caused by lower prices for autos, engines and parts. The Raw Materials Price Index (RMPI) edged higher 3.8% in April, after falling by a downwardly revised 1.5% the previous month.
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