Imports increased 3.1% after two consecutive monthly declines, largely driven by motor vehicles and parts as well as industrial machinery, equipment and parts. Imports of consumer goods also contributed with a 3.8% rise in January after three months of declines. By volume, total imports were up 4.1%. The Canadian dollar was trading 0.1% lower at 1.3765 to the greenback, or 72.65 U.S. cents, which was near its weakest level in four months. ($1 = 1.3760 Canadian dollars) (Reporting by Ismail Shakil; Additional reporting by Fergal Smith in Toronto and Dale Smith in Ottawa; Editing by Mark Potter and Will Dunham)
(Adds analyst comments, background)
By Ismail Shakil
OTTAWA, March 8 (Reuters) - Canada recorded an
unexpected trade surplus of C$1.9 billion ($1.38 billion) in
January, driven by broad-based gains in exports, while imports
posted a smaller increase led by motor vehicles and parts,
Statistics Canada data showed on Wednesday.
Analysts had forecast a trade deficit of C$60 million in
January. Statscan also revised December's trade figures to a
surplus of C$1.2 billion from an initial C$160 million deficit.
The data points to a "stellar" start to the year that should
help lift economic prospects at a time when high interest rates
are expected slow the domestic economy, Stuart Bergman, chief
economist at Export Development Canada, said in an interview.
The Bank of Canada, which kept rates on hold on Wednesday,
has raised rates by a total of 425 basis points over the past
year to tame inflation. Total exports rose 4.2% in January on the back of gains in
all product categories that more than offset a fall in energy
products exports. Excluding energy, exports rose 6.1% to an
all-time high of C$51.6 billion.
Farm, fishing and intermediate food products, motor vehicles
and parts, and metal and non-metallic mineral products all
contributed roughly equally to the rise in exports, Statscan
said. By volume, total exports were up 5.3% in January.
"We saw real gains," Bergman said, noting the jump in
trading volume that made up for a slight drop in prices. "This
is pure physical shipments ... this is the stuff that we want to
see."
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