By Paul Vieira
OTTAWA--Canada's current-account deficit in the third quarter widened slightly from a significantly revised shortfall in the previous three-month period. A large deficit in the trade of goods and services was offset by a gain in investment income.
The country's current-account deficit in the third quarter stood at a seasonally adjusted 7.53 billion Canadian dollars, or the equivalent of $5.80 billion, Statistics Canada said Monday. The previous quarter's deficit was revised to show a C$7.00 billion deficit, versus an earlier estimate of a C$8.63 billion. Market expectations were for a C$10.2 billion deficit, according to economists at BMO Capital Markets.
The data agency attributed the second-quarter revision to the new introduction of a new benchmark to gauge activity in services and investment income. The data agency added data covering current-account balances were revised back to the first quarter of 2017.
The current account is the broadest indicator of our trading and investing relationship with other nations. A deficit suggests an economy is importing more capital, goods and services than it exports. Since 2009, Canada has recorded a current-account deficit every year.
Official data measuring Canada's gross domestic product in the third quarter is set for release Tuesday, with the consensus calling for a sharp rebound in growth, of 40%-plus at an annual rate. Later Monday, the Canadian government issues an economic and fiscal update, at which time it is expected to show a projected deficit for fiscal 2020-21 of nearly C$400 billion, or 20% of the country's GDP.
According to the balance-of-payments report, the deficit on international trade in goods and services widened to C$8.19 billion from C$7.46 billion in the previous quarter. Primary income, which covers investment income and compensation of employees, recorded a surplus of C$1.68 billion, or wider than the C$1.30 billion in the previous three-month period.
Statistics Canada said Foreign investors increased their holdings of Canadian securities by more than C$11.0 billion in the third quarter. Nonresidents increased their exposure to equities and money market instruments, but reduced their holdings of Canadian bonds.
Write to Paul Vieira at firstname.lastname@example.org
(END) Dow Jones Newswires