In June 2024, Canada recorded an unexpected positive trade balance of CAD 638 million (approximately USD 461 million), a significant event given the analysts' forecasts of a CAD 1.84 billion deficit. This result was made possible by the increase in oil and gold exports, which for the first time in four months surpassed imports, according to Statistics Canada.

The analysis shows that the total export volume in June increased by 5.5%, mainly due to the rise in raw oil and unprocessed gold shipments. Imports, on the other hand, grew by 1.9%, largely due to increased imports of passenger cars and light trucks. In physical terms, exports rose by 3.8%, while imports increased by 1.3%.

It is interesting to note that the data on imports and exports not only confirm economic stability but also reveal several key trends. The sharp increase in energy exports by 11.7% in June was primarily due to higher raw oil prices and increased shipment volumes. An important factor was the expansion of shipments to Asian countries via the recently upgraded Trans Mountain pipeline.

At the same time, the increase in imports of cars and auto parts, which grew by 8.2% to a record CAD 6.8 billion, also plays a significant role. This growth can be attributed to the recovery from production disruptions and delays in deliveries observed at the end of 2023 and early 2024.

Moreover, trade data with the United States, Canada’s largest trading partner, shows positive trends: exports to the U.S. increased for the third consecutive month, leading to an increase in the positive trade balance with this neighbor to its highest level since November 2023. This highlights the importance of the American market for the Canadian economy.

Against the backdrop of these economic changes, the Bank of Canada continues to ease monetary policy, having lowered the base rate for the second consecutive month in July. The central bank expects accelerated economic growth in the second half of 2024, linked to increased exports and a recovery in consumer spending. However, GDP data show that the monthly growth rate slowed to 0.1% in June from 0.2% in May, which may indicate a need for additional economic stimulus.

Overall, the positive trade balance of Canada in June was a bright signal of improving economic conditions, but the sustainability of these trends will depend on numerous factors, including global economic conditions and domestic economic policy.