Canadian Economy Cooled Down As Exports Fell

The trade deficit in Canada expanded last month as exports declined for three straight months, which indicates that Canadian economy cooled down after the economic development in the first half of 2017. According to the report from the Statistics Canada, the merchandise trade deficit of the country gained $3.4-billion in the previous month versus $3-billion in July. The losses in August was really high, overcoming economist’s expectations worth $2.6-billion. Economists presumed that trade would likely rebound due to the sluggish performance during the months of June and July.

Currently, the country was able to gain a $10.1-billion worth of cumulative deficit in the last quarter data, which tripled the deficit amount of the prior three months. This further shows that Canada weakened in Q3. The indicator for the economists is the slackening growth of exports and it is considered as a major factor in the  4.5-percent annualized growth in Q2. Moreover, exports dropped by 1 percent in the month which is the third decline in a row. While volumes are down by 1.9 percent amid high prices.

After the surge in May, exports slipped almost by 11 percent in value and 6 percent in volume. The downswing was caused mainly by the sharp currency appreciation of the loonie dollar. As the Canadian dollar jumped by 13 percent against the U.S. dollar during early May and September and made Canadian products more expensive for foreign consumers.

On the other hand, few economists mentioned that the US demand for Canadian products also slowed down due to disastrous hurricanes that hit the southern region of the US, recently. They anticipated that trade figures will bounce back in demand considering that these countries returned to normal business operations and recovered from the damage caused by these calamities.