current account deficit of Canada (on an adjusted basis for seasonal variations) decreased $ 0.4 billion in the third quarter to $ 16.2 billion. A decrease in the trade in goods deficit was partially offset by a higher deficit on the flow of cross-border investment income.
In the financial account (not seasonally adjusted), transactions in direct investment liabilities, largely foreign acquisitions of Canadian companies, led the inflows into the economy.
overall deficit on trade in goods narrowed
deficit on international transactions of goods has been reduced from $ 1.3 billion in the third quarter to 5, $ 1 billion. After a sharp increase in the first quarter, Canada's trade in goods deficit with the rest of the world declined for the second consecutive quarter.
The goods surplus with the United States increased by $ 0.5 billion, despite lower crude oil exports. The trade deficit with all other countries decreased by $ 0.8 billion. One of the main contributors was the trade with India, where the goods surplus rose $ 0.6 billion on higher exports.
The total exports of goods increased $ 4.7 billion to $ 134.2 in the third quarter. The highest increases were registered in consumer goods and motor vehicles and parts. Consumer goods increased $ 2.3 billion, mainly on higher volumes of goods and other supplies and pharmaceuticals. Motor vehicles and parts rose $ 2.2 billion, due to price and volume of passenger cars exported higher. Aircraft and other transportation equipment increased by $ 0.5 billion, mainly on higher prices. Moderating these gains was a decrease of $ 2.2 billion in exports of energy products, lower crude oil prices account for almost all of the reduction.
Total imports of goods rose $ 3.4 to 139.3 billion $ in the third quarter. Imports of consumer goods increased $ 1.1 billion, on higher prices. equipment and electronic and electrical parts rose $ 1.0 billion, led by higher volumes of communications and audio and video equipment. Imports of basic chemicals and industry, plastic and rubber increased by $ 0.7 billion, also on higher volumes. Motor vehicles and parts increased $ 0.4 billion, an increase of $ 1.1 billion coins was offset by a reduction in imported cars.
The trade deficit narrows slightly services
The overall deficit on international trade in services fell by $ 0.1 billion to $ 5.6 billion in the third quarter.
The travel deficit was down $ 0.1 billion to $ 4.0 billion. Non-residents increased their spending in Canada more travelers entered the country during the quarter, which generated an increase in revenue. However, payments were down slightly, reflecting lower spending by Canadian travelers in the United States, led by increased spending in non-US countries.
Changes in the deficit of transport services and the excess of commercial services were marginal and offset each other in the quarter.
deficit on investment income and high income developing
the investment income deficit increased $ 0.6 billion to $ 4.2 billion third trimester. Profits earned by foreign direct investors on their Canadian assets increased $ 0.2 billion, while those earned by Canadian direct investors on their foreign assets were largely unchanged. the higher interest payments on other investment liabilities mainly accounted for the remaining increase. For portfolio investment, the income of both assets and liabilities increased by the same amount in the quarter.
The secondary income deficit increased $ 0.5 billion to $ 0.8 billion the government transfer payments increased following a weak second quarter
financial account
transactions in direct investment remain strong
transactions of direct investment liabilities to cover claims. foreign parents "on Canadian subsidiaries and the debt of Canadian parents held by foreign subsidiaries totaled $ 31.4 billion in the third quarter. It was the highest such investment since the fourth quarter of 07. Most of this investment was in the form of equity. Notably, foreign mergers and acquisitions in Canada were highest in almost eight years to $ 18.4 billion.
About assets, direct investment reached $ 27.7 billion in the third quarter after a record cash outflow of $ 37.8 billion in the second quarter. Direct investment assets include Canadian requests from parents to their foreign subsidiaries, and debt held by foreign parents their Canadian subsidiaries. The activity in the third quarter was driven by cross-border M outwards, which remained strong at $ 20.7 billion. Since the beginning of the year, the Canadian Mergers and acquisitions abroad totaled $ 48.7 billion, already exceeding the highest annual level ever.
Foreign holdings of securities decline in Canada for the first time since the end of 08
foreign investors reduced their holdings of Canadian securities $ 0.9 billion in the third quarter compared to a $ 30.1 billion investment in the previous quarter. Non-residents continued to invest in Canadian debt securities, but at a slower pace. However, they have reduced their equity portfolio during the quarter. This was the first divestment in Canadian securities since the fourth quarter of 08. The US dollar depreciated by 5.1 Canadian cents against the US dollar during the quarter.
The reduction of $ 9.2 billion in foreign holdings of Canadian equities was the largest of these divestment since the first quarter of 2013. This decrease is related to cross-border mergers and acquisitions activity . Foreign portfolio investors made Canadian shares to foreign direct investors in July as a result of this activity.
Foreign investors acquired $ 12.8 billion of Canadian bonds in the quarter, all business obligations of both private companies and public enterprises. Foreign holdings of Canadian government bonds declined, acquisitions of federal bonds were more than offset by a divestment in provincial government bonds. At the same time, foreign investors pulled $ 4.4 billion fund Canadian money market, mainly the provincial government and the paper private companies.
Canadian investment in foreign securities slowed
Canadian investment in foreign securities slowed to $ 2.1 billion in the third quarter, following an acquisition of 25 , $ 6 billion in the second quarter. Most of the investment activity was in foreign bonds, Canadian investors sold money market instruments, while foreign equity assets were virtually unchanged. On a geographical basis, Canadians purchased $ 15.2 billion of US securities and sold $ 13.1 billion of non-US foreign securities during the quarter.
The other type of investment generates an inflow of funds
Transactions in the category of other financial account investments generated a net inflow of 10 funds, $ 7 billion in the third quarter. This activity primarily reflects a reduction in currency holdings and deposits held abroad.
Statistics Canada
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