Canada's current account swung to a C$8.84 billion surplus in the second quarter, more than double the C$3.9 billion economists had forecast. The surplus is the largest since 2005 and follows a revised C$8.31 billion deficit in the first quarter, driven by a jump in energy exports and record foreign buying of Canadian government bonds.
Canada's current account swung to a C$8.84 billion surplus in the second quarter, more than double the C$3.9 billion economists had forecast, Statistics Canada reported Thursday. The reading marks the largest surplus since 2005, and it follows a revised C$8.31 billion deficit that Statistics Canada recorded in the first quarter.
The turnaround came mainly from goods exports. Energy products led the way, as shipments rose 27.4% in the second quarter while the war in Iran pushed global oil prices higher. Against that backdrop, crude oil and bitumen exports reached a record level during the period.
Foreign investors also added to their exposure to Canada over the same three months. They increased their holdings of Canadian government bonds by C$80.8 billion, also a record for the country. Foreign direct investment into Canada rose as well, totaling C$25.9 billion, up from C$18.8 billion in the first quarter.
Statistics Canada said the increase in direct investment came from earnings that foreign parent companies reinvested in their Canadian affiliates, with more than half of the total direct investment going into the manufacturing, finance and insurance sectors. The current account, as a measure, tracks trade, investment income and other cross-border transactions between Canada and the rest of the world.
Source: Investing.com
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