The figures compiled by Government revealed that Canada’s current account deficit to have contracted in the first quarter on account of rise in demand for exports, while the Government’s budget deficit for the year may be smaller than originally augured.

The current account deficit is reported to stand at $7.8 billion, compared with $10.2 billion in the fourth quarter of 2009, StatsCan uncovered. The decline recorded was more compared to what analysts predicted.

The budget deficit from April 2009 to March 2010 was recorded to be $47 billion, uncovers the preliminary figures from the Department of Finance.

In addition, the figures posted that revenue from corporate taxes has been standing at $4.8 billion surpassing expectations in the 2010 budget, however, spending will be nearly $1.7 billion lower than estimated, assisting in lowering the deficit.

“Canada is still running twin deficits, but both of the twins are less problematic than their U. S. counterparts,” quoted, Douglas Porter, BMO's deputy chief economist, in a note. “The (current account) deficit is certainly manageable, but remains a huge switch from the 10-year string of surpluses from 1999 to 2008”.

Canada’s exports are posted to face a negative effect by the recession in the U. S.