‘‘Net exports are on track to exert a very modest drag on GDP growth in the second quarter. That said, we look for that to turn positive over the balance of the year"
-TD Securities strategist Mazen Issa
It seems that the phase of so-called "slowest exports recovery" since World War II in Canada is moving to an end, as the nation's trade deficit shrank more than expected in June, supported by a strong rebound in exports, Statistics Canada said Tuesday. Canada's trade gap stood at C$469 million in June, compared with a revised C$781 million registered a month earlier. Economists forecast the June's deficit to reach C$510 million. The main reason for such an upbeat figures were strong exports, as Canadian merchandise overseas sales jumped 1.4% to C$39.6 billion, while imports edged higher 0.6% to C$40 billion. The main contributors to export growth were shipments of precious metals, passenger cars aircraft as well as light trucks.
Even though it was the 18th consecutive month of negative trade balance, which extends the longest streak of deficits in a quarter century, recent figures point that trade should be only a slight drag on gross domestic product last quarter. The latest estimates are showing the economy, has probably, expanded 1.6% in the second quarter, down from a 2.5% growth recorded in the first three months.
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