Canada posts higher than expected trade deficit of C$1.26 bln in Sept
By Promit Mukherjee
OTTAWA, Nov 5 (Reuters) -Canada posted a higher than expected trade deficit of C$1.26 billion ($908 million) in September as a larger drop in imports failed to offset a drop in exports, data showed on Tuesday.
The September data was its seventh straight monthly trade deficit, primarily led by lower exports to major trading countries other than its biggest trading partner the U.S., Statistics Canada said.
Due to an ongoing digital transition at Canada Border Services Agency Assessment and Revenue Management, from where Statscan gets most of its trade data, results for September include greater use of estimation.
Analysts polled by Reuters had predicted a deficit of C$800 million and Statscan revised sharply the August trade deficit to C$1.47 billion from C$1.1 billion.
The biggest hit to exports, which dropped by 0.1%, came from a 5.4% drop in shipments of metal and non-metallic mineral products, led by 15.4% slump in the unwrought gold category.
Lower prices of metals and energy products were behind the monthly decrease in exports with the total exported goods prices dropping 1.5%, Statscan said, adding that in volume terms exports rose 1.4%.
Inbound shipments declined 0.4% in September but were largely flat in volume terms. Imports of metal and non-metallic mineral products decreased 12.7% and contributed the most to the overall decline.
Drop in imports largely reflect Canada's weak demand environment which has taken a hit under the impact of high interest rates which were kept at a 23-year of 5% for over a year before the Bank of Canada started reducing it from June.
Since then, the BoC has cut its key policy rate at its four consecutive meetings to 3.75%.
The BoC will announce its next monetary policy decision on Dec. 11 with over 45% of bets in favor of another 50 basis point cut.
Total exports were at C$63.88 billion while imports were at C$65.14 billion.
Canada's trade surplus with the U.S., which accounts for over three-quarters of its total exports, increased to C$8.29 billion in September from C$7.82 billion a month ago. Imports from the U.S., which is 60% of all Canadian imports, rose 0.8% month-on-month.
($1 = 1.3882 Canadian dollars)
Reporting by Promit Mukherjee in Ottawa; Editing by Dale Smith
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