WASHINGTON, May 12: The US trade deficit shrank in March to its lowest level since Hurricane Katrina struck last year, helped by a surprise slump in oil imports, the government said on Friday.

The deficit sank to $62.0 billion from $65.6 billion in February, the Commerce Department said. That confounded Wall Street forecasts for an expansion to $67.0 billion.

It was the best trade performance since August, and came in part thanks to record exports to some of the largest US trading partners.

But the deficit widened with China, which stands accused in Washington of resorting to underhanded tactics to bolster its global commerce.

It is the first time the deficit has declined for two straight months since October and November 2003. The fall was all the more surprising as exports of civilian aircraft, one of the few bright spots for US trade, dipped in March.

The trade data boosted estimates of gross domestic product (GDP) growth for the first quarter, which was initially reported by the government at a robust 4.8 per cent.

However, economists warned that a long-running deterioration in the US trade picture was likely to resume after the slump in energy imports in March.

“Exports were pretty strong in the month. That’s good to see. But the real surprise, which nobody saw coming, was the value of oil imports were down $2 billion,” Wachovia global economist Jay Bryson said.

But he added: “It doesn’t smell right to me. So I would think that as we go forward, we’re going to see a big jump back in oil imports. We all know what’s happened to oil prices recently.”

The Commerce Department said that imports in March fell 0.8 per cent to $176.7 billion, driven down by declines in the petroleum bill and in vehicle imports. Exports grew a faster 1.9 per cent to $114.7 billion.

Above all, the value of US imports of oil products dived in the month — the petroleum deficit was down to $20.1 billion from $22.6 billion, its lowest level since July last year.—AFP