Canadian Current Account Deeper in the Red

May 29, 2009

A trade surplus of just C$ 845 million in 1Q09 was the smallest in just over 30 years and down from C$ 12.02 billion per quarter in 2006-8.  However, due to a 35% contraction of payments on net foreign investments in Canada, the C$ 9.056 billion current account deficit was not quite as big as forecast.  As a percent of GDP, the current account swung from a surplus of 1.6% in the first half of 2008 to a deficit of roughly 2.5% last quarter.  Collapsing U.S. demand for Canadian goods and services especially in lumber, autos and energy will be reflected in hugely negative first-quarter GDP growth.  The consensus forecast for this indicator, which gets released Monday at 12:30 GMT, is a figure around minus 6.5% at a seasonally adjusted annualized rate.  In 4Q08, GDP fell 3.4% saar.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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