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Canada’s trade deficit is shrinking as gold and energy exports increase

Arafat Rahman

Canada’s trade deficit of $105 million was shortened in April.

Canada’s trade deficit of $105 million was shortened in April. However, due to the increase in gold and fuel sector, the deficit amount has been lower than predicted. This information has been reported from a recent Reuters report.

Earlier, a Reuters analyst team predicted a $140 million Canadian dollar trade deficit in April. The deficit was much higher in March. Initially, 228 million Canadian Dollar Trade Deficits were calculated. Later, it was revised and brought down to $199 million Canadian dollars.

Statistics Canada says exports of fuel and crude gold have increased in April. As a result, the country’s total exports increased by 2.6%. On the other hand, imports have also increased by 1.1%. But the export amount decreased by 1.7%, but imports decreased by 2%.

StatsCan says exports of refined fuel products and molecular fuels in Canada have decreased. But compared to that, exports of natural gas, crude fuel oil and liquefied natural gas have increased in the fuel sector. Besides, the price of crude gold has also increased due to the increase. As a result, gold and fuel sector contribute to reduce trade deficit.

Meanwhile, the Canadian dollar has been undervalued by 4 percent since trade data was released. Currently, 1.3697 Canadian dollars are available against US$1.

Canada’s neighboring country is the country’s largest trade partner. The United States is the country’s three-quarter export destination. In April, the country’s exports increased by 2.4 percent, which helped Canada increase trade surplus.

However, the demand for Canadian products in the US market is declining recently. For this reason, Canadian exporters can face challenges again. Export Development Canada’s chief economist Stuart Bergman said the situation is not an ideal scenario for exporters.

StatsCan released a initial forecast on Canada’s GDP growth last week. The company said in a forecast that the country’s economic growth had stagnated in March. But then the country has increased oil-gas extraction, minerals and stone search. As a result, the country’s growth could increase by April.

The latest inflation measured in Canada by 2.7%. The target of reducing this rate to 2%. Last week, the Central Bank of Canada reduced interest rates for the first time in four years. The bank has also announced further reduction of interest rates if needed.

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