Canada posted its first annual trade deficit in 34 years last year as a global recession slammed demand for exports.
The country's deficit was $4.8-billion for 2009, a sea change from a year-earlier surplus of $46.9-billion, Statistics Canada said Wednesday. The deficit widened more than expected in the last month of the year as imports of goods such as autos rose at a faster pace than exports.
Much of plunge in trade was due to the "calamitous drop in commodity prices at the start of 2009, which skewered Canada's terms of trade," said Douglas Porter, deputy chief economist at Bank of Montreal, in a note. A partial recovery at the end of the year means trade added "moderately" to real fourth-quarter GDP growth, he added.
In December, the country's deficit hit $246-million from a revised $201-million a month earlier, Statscan said. Imports rose 1.8 per cent while exports advanced 1.7 per cent. November's deficit was originally pegged at $344-million.
Economists polled by Bloomberg had expected a $100-million deficit in the month.
Exports continued to climb at the end of the year. "Since May, with the exception of August, exports have been on the rise," the report said, although exports remain 8 per cent below year-earlier levels.
Exports rose to $32.2-billion, the fourth month in a row of gains as volumes rose 2.1 per cent. Auto products accounted for almost two-thirds of the growth, followed by growth in cars and parts. Aircraft and industrial machinery exports also climbed, as did natural gas and petroleum.
Imports increased to $32.4-billion on higher volumes and prices. Auto products led the gain, followed by auto parts, cars, trucks and iron ores. The country also imported more precious metals and crude petroleum.
Canada's trade surplus with the United States, it's largest trading partner by far, grew to $3.7-billion from $3.4-billion in November as exports to the country rose 2.9 per cent, outstripping a 2-per-cent gain in imports.
Canada's trade deficit with countries other than the U.S. widened to $3.9-billion from $3.6-billion in November as exports fell and imports rose.