Statistics Canada announced on Tuesday that Canada's merchandise trade deficit stood at CAD1.41 billion in March, narrowing from a revised CAD0.89 billion gap in February (originally a CAD0.98-billion gap).

Economists had expected a deficit of CAD2.00 billion.

According to the report, the country's both imports and exports decreased notably, as the impact of measures to contain the spread of COVID-19 in Canada became evident. Its exports fell 4.7 percent m-o-m to $46.3 billion in March, the lowest level since January 2018, driven by lower exports of aircraft and other transportation equipment and parts (-24.8 percent m-o-m), motor vehicles and parts (-14.4 percent m-o-m) and energy products (-7.4 percent m-o-m). Meanwhile, imports decreased 3.5 percent m-o-m to $47.7 billion in March, a level not observed since October 2017, led by declines in imports of aircraft and other transportation equipment and parts (-17.1 percent m-o-m), motor vehicles and parts (-13.1 percent m-o-m), and electronic and electrical equipment and parts (-3.5 percent m-o-m).

In the first quarter of 2020, exports decreased 3.0 percent, a third consecutive quarterly decline, imports fell 2.0 percent, following a 2.0 percent drop in the last quarter of 2019.