OTTAWA, Feb 7 Reuters Canada posted a C160 million 119.1 million trade deficit in December as energy products dragged down exports and slowed economic growth weighed on consumer goods imports, data showed on Tuesday.

The deficit was better than analysts39; expectation for a C500 million deficit, and was smaller than November39;s C219 million deficit, which was revised by Statistics Canada.

While net trade contributed positively to the likely 1 annualized gain in gross domestic product last quarter, the drop in imports points to weaker domestic demand, said Stephen Brown, senior Canada economist at Capital Economics.

Total exports fell 1.2 in December, dragged down by energy products, which fell for a third straight month in December to their lowest level in 2022, Statscan said. By volume, total exports were up 0.9.

The decline in energy products was partly offset by exports of motor vehicles and parts, which rose 21 to C7.5 billion, its highest level since September 2020.

Total imports were down 1.3, largely attributable to declines in the consumer goods and motor vehicles and parts product sections. By volume, total imports fell 1.9 in December.

The figures show there was not a great handoff into 2023, certainly not the handoff that we would like to see, Stuart Bergman, chief economist at Export Development Canada, said in an interview.

Last month the Bank of Canada hiked its key interest rate to 4.5, the highest level in 15 years, and said it would hold off on…