Statistics Canada announced on Friday that Canada’s merchandise trade deficit stood at CAD1.67 billion in December, narrowing from a revised CAD3.56-billion gap in November (originally a CAD3.34-billion shortfall). This was the lowest trade gap since June 2020. Economists had forecast a deficit of CAD3.00 billion.

According to the report, Canada’s exports grew by 1.5 percent m-o-m to CAD47.32 billion in December, mainly driven by higher exports of energy products (+10.2 percent m-o-m). Meanwhile, imports decreased by 2.3 percent m-o-m to CAD48.98 billion in December, primarily due to lower imports of consumer goods (-8.0 percent m-o-m).

For the year 2020, Canada's trade deficit totaled CAD36.2 billion, more than double the shortfall observed in 2019. Its exports declined 12.3 percent in 2020, while imports dropped 8.6 percent.