OTTAWA, Dec 6 Reuters Canada recorded a largerthanexpected trade surplus of C2.97 billion 2.19 billion in October, as exports rose marginally but imports slumped, Statistics Canada said on Wednesday.

Analysts in a Reuters poll had forecast a C1.60 billion surplus. September39;s surplus was downwardly revised to C1.1 billion from C2.04 billion initially reported.

Total exports increased 0.1 while imports were down 2.8.

The decline in imports was led by metal and nonmetallic mineral products and motor vehicles and parts, Statscan said. By volume, total imports were down 3.2.

The motor vehicles and parts category recorded its first monthly decline since March, with imports of passenger cars and light trucks being the largest drag.

In the context of unstable supply due to strikes by U.S. auto workers in October, a large share of the monthly decline was attributable to lower imports from the United States, Statscan said.

The slump in imports suggests that firms are now drawing down their inventories as demand weakens, raising the risk that the economy will contract again in the fourth quarter, Stephen Brown, an economist with Capital Economics, said in a note.

Canada39;s gross domestic product unexpectedly contracted in the quarter. The Bank of Canada anticipates growth to remain muted until the end of 2024 as high interest rates weigh on the economy.

On Wednesday, the central bank left its key policy rate at a 22year high of 5.

On the export side, aircraft and…