Record gold exports drive Canada's merchandise trade surplus, supporting robust GDP growth
Canada witnessed a significant increase in its merchandise trade surplus in February, reaching $1.4bn, propelled by record-high exports of gold, according to Statistics Canada.
This marks a notable rise from the revised surplus of $608m recorded in January, as detailed by The Canadian Press.
The boost in February's total exports, which climbed 5.8 percent to $66.6bn, was largely driven by a surge in exports of unwrought gold. Specifically, exports of metal and non-metallic mineral products jumped 31.1 percent to an unprecedented $9.4bn.
This increase was fueled by heightened shipments of refined gold and transfers of gold assets within the banking sector.
Statistics Canada also highlighted that, when excluding unwrought gold, exports experienced a growth of 2.8 percent for the month.
On the other hand, total imports in February saw a 4.6 percent rise to $65.2bn, with imports of electronic and electrical equipment and parts escalating by 9.7 percent to a record $7.6bn.
In terms of volume, exports went up by 6.2 percent and imports increased by 4.1 percent in February.
Shelly Kaushik, an economist at BMO, pointed out that the uptick in merchandise trade activity in February supports the robust preliminary GDP growth estimate for the month and indicates that economic activity may have accelerated in the first quarter.
Adding to this economic optimism, Statistics Canada's preliminary estimate last week suggested a real GDP growth of 0.4 percent in February, buoyed by strong performance in the mining, quarrying, oil and gas extraction, manufacturing, and finance and insurance sectors.
This followed a 0.6 percent growth in January, which was aided by the resolution of public sector strikes in Quebec.
The trade dynamics with the United States also improved, with Canadian exports to the US increasing by 3.3 percent and imports from the US rising by 3.4 percent in February. This resulted in a trade surplus with the US of $9.1bn, up from $8.8bn in January.
Conversely, Canada's trade deficit with countries other than the US narrowed to $7.7bn from $8.2bn in January.
Moreover, the country's international trade in services deficit decreased to $1bn in February, down from $1.2bn in January, as service exports rose by 1.9 percent and service imports by 0.8 percent.
Combining international trade in goods and services, Canada's total trade balance with the world in February was a surplus of $367m, a significant improvement from the $595m deficit observed in January.
