- Bank of Montreal
Canada's exports fell sharply in March and the country's trade deficit with the rest of the world widened to a record level, fuelling doubts on the strength of the recovery in the resource-reliant economy. Canada posted a record trade deficit of C$3.41 billion in March, Statistics Canada reported, whereas expectations were for a smaller C$1.4 billion trade deficit. Exports dropped 4.8% following a dramatic 6.6% decline in the preceding month. The disappointing figures were led by slower exports of autos and parts, down 6%, as well as consumer goods, which slipped 4.6%. In the meantime, imports fell 2.4% to C$44.4 billion in March, with volumes edging down 0.3% and prices declining 2.1%. A decrease in imports of consumer goods and aircraft and other transportation equipment and parts was partially offset by higher imports of energy products. Exports to the US plunged 6.3% to $30.4 billion in March, while imports fell 4.8% to $28.9 billion.
The Canadian economy shrank slightly less than expected in February, as the GDP dropped 0.1% after growing 0.6% in January. The Bank of Canada projects growth of 2.8% during the first quarter of the year, but warns that the Q1 boost is likely temporary, with much softer gains estimated for the second quarter.
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