Canada trade deficit shrinks slightly in October, still higher than expected

OTTAWA (Reuters) - Canada's trade deficit narrowed slightly to a still greater-than-expected C$3.76 billion ($2.94 billion) in October as exports grew at a faster pace than imports, Statistics Canada data showed on Friday.

Imports are back to the level they were in February, before the COVID-19 pandemic struck, but exports are still lagging.

Analysts polled by Reuters had forecast the shortfall would drop to C$3.00 billion from the revised deficit of C$3.82 billion in September.

Exports increased by 2.2% to C$46.47 billion, partially on higher shipments of pharmaceutical products, but were below the C$48.21 billion in February. Imports rose by 1.9% to C$50.23 billion, in part due to higher imports of cell phones, for the first time exceeding the C$50.00 billion seen in February.

Exports to the United States, by far Canada's largest trading partner, rose by 2.0% while imports fell by 2.3%. As a result, the trade surplus with the United States in October grew to C$3.05 billion from C$1.69 billion in September.

($1=$1.28 Canadian)

(Reporting by David Ljunggren; Editing by Pravin Char)