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Still Running Large Basic Balance Deficits (2/2)

CANADA DATA
  • Looking more broadly than the current account data and how they compare particularly favourably with pre-pandemic levels, it’s worth remembering that large net outflows from foreign direct investment in the financial account leave sizeable basic balance deficits.
  • A four-quarter rolling average of the non-seasonally adjusted financial account data sees net FDI flows of -1.8% GDP in Q3, adding to the -1% GDP for the current account on the same basis.
  • This basic balance deficit of -2.7% GDP compares with -2.1% GDP as of 4Q22 and -2.2% GDP in 4Q21, although is still lower to the -3.5% GDP in 4Q19 and -3.6% GDP in 4Q18.

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