CANADA DATA
- Building from what our policy team wrote, the current account surprised positively for Q3, with a deficit of C$3.2bn (cons C$8.7bn) after a downward revised C$4.7bn (initial C$8.5bn) in Q2.
- Those large revisions extend further back as part of annual revisions back to 2021 but are largest from 2H23 onwards: “Starting with the 2022 reference year, new data sources and methodologies have been introduced to better capture the compensation and expenditures of temporary foreign workers in Canada. Compensation to temporary foreign workers is recorded as a payment abroad in the Balance of Payments framework, while expenditures of temporary foreign workers in Canada are classified as business travel exports.”
- The latest profile sees a current account deficit at an estimated 0.4% GDP in Q3 after 0.6% GDP in Q2 and 0.2% GDP in Q1. That average deficit of 0.4% GDP through 1H24 previously was estimated to have been 0.9% GDP.
- Those sizeable revisions aside, latest quarterly developments saw a smaller services surplus (0.1% GDP after 0.3%) more than offset by a larger investment income surplus (0.6% GDP after 0.2%). The latter was driven by the joint largest direct investment-related surplus as a % GDP since 2Q20 rather than portfolio investment where the deficit remained at cycle highs of 1.6% GDP (last seen larger in 2003).
- It leaves a current account deficit on a far healthier standing than pre-pandemic deficits in the region of 2-3% GDP.
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