OTTAWA -- Canada's merchandise exports increased 2.3 percent to just under $29.3 billion in June, halting three consecutive monthly declines.

Imports, however, fell 1.3 percent to just over $29.3 billion, reports Stats Canada. As a result, Canada's trade deficit with the world narrowed to $55 million from $1.1 billion in May.

The increase in exports was attributable to a substantial rise in exports of energy products (+14%), which if excluded, would have pushed levels down slightly by 0.5 percent.

Imports, which have been on a downward trend since October 2008, fell for the fourth consecutive month. Declines in machinery and equipment, industrial goods and materials, and other consumer goods more than offset increases in the energy products, agricultural and fishing products, automotive products and forestry products.

Export prices were up 2.2 percent, as the prices rose for energy products and industrial goods and materials, while import prices fell 0.8 percent.

Surprisingly, exports to the U.S. climbed 5.1 percent, on the back of crude petroleum (87 % of all energy products to the U.S.), while imports fell 1.8 percent.

Exports of machinery and equipment decreased 4.1 percent to $6.4 billion, however -- the lowest level since January 1998. This was mainly the result of declines in exports of telecommunication equipment and office electronic equipment.

As usual, exports of automotive products fell 5.6 percent to $2.9 billion. This represents about one-third of the peak value registered in January 2000, notes Statscan.