By Julie Gordon

OTTAWA (Reuters) -Canada posted a shock commerce deficit in December, as imports hit a brand new document excessive and exports fell from November, official information confirmed on Tuesday, however economists anticipate an export rebound in January on surging power costs.

Canada’s commerce deficit was C$137 million ($108 million) in December, effectively beneath analyst forecasts of a surplus of C$2.50 billion. November’s surplus was additionally revised all the way down to C$2.47 billion from C$3.13 billion, nonetheless good for a 13-year document.

Imports rose 3.7% to hit an all-time document for the third consecutive month, pushed by cellphones and different electronics, whereas exports fell 0.9%, totally on decrease power costs.

“It is a fairly small deficit, I’d take a look at it as roughly balanced. Nevertheless it was a little bit of a cut up month in December,” stated Stuart Bergman, deputy chief economist at Export Growth Canada.

Bergman famous sturdy imports of motor autos and elements, which bodes effectively for cross border commerce, together with sturdy exports of shopper items. Power weighed on exports as crude costs fell sharply, however oil costs have since rebounded.

“We anticipate exports ought to in all probability come again in January on stronger power costs,” stated Bergman.

Nonetheless, the drop in exports in December will possible act as a drag on fourth quarter GDP, analysts stated.

For full-year 2021, Canada’s annual merchandise exports rose 22%, Statscan stated, with the worth hitting a document C$637 billion. With the impact of upper costs stripped out, 2021 exports had been 5.4% down from 2019.

“The additional upswing in power costs bodes effectively for the commerce stability within the early a part of 2022,” stated Shelly Kaushik, economist at BMO Capital Markets, noting Canada’s first annual surplus since 2014.

The Canadian greenback was buying and selling 0.3% decrease at 1.2710 to the U.S. greenback, or 78.68 U.S. cents.

($1 = 1.2713 Canadian {dollars})