Trade deficit shrinks to around $3 billion in July

The gap between what Canada sells to the rest of the world and what it buys shrank to a gap of about $3 billion in July, as imports fell by more than exports did.

Statistics Canada reported Wednesday that fell6 per centand exports decreased4.9 per cent, "both due mainly to the effect of widespread price decreases."

Canada imported $47.2billion worth of goods and services in June, the first decline since last year.

Exports, meanwhile, fell to$44.1billion, leaving a trade deficit of just over $3 billion.

Canada's trade deficit with the U.S. widened from$1.8billion in June to $2.9billion in July. With the rest of the world, however, Canada posted a large trade surplus, expanding from$5.6billion in June to $5.9billion in July.

While encouraged by the smaller deficit, BMO economist Benjamin Reitzes called it "still-sizeable" butsuggested that a rebounding oil price could make it shrink even more soon.