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Non-Energy Balance Helps Limit Slide Back To Trade Deficit

  • The merchandise trade data were on balance slightly better than expected in December, printing a deficit of -C$0.16B (cons -C$0.5B).
  • It followed a downward revised -C$0.2B (-C$0.04B prior) but the three prior months are now seen to have averaged surpluses of C$377B vs C$105B initially.
  • Energy proceeds did indeed shrink but the non-energy deficit also narrowed notably on the month.
  • Combined with the service balance narrowing to its smallest deficit since March at -C$1.16B and it left a goods & services balance at an estimated -1.1% GDP in Q4. That’s little changed from the -0.9% GDP in Q3 but still technically the largest deficit since 4Q20 despite a correction in non-energy deficits.

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