Canada’s economy grew 0.3% in April, saw another expansion in May
Canada’s gross domestic product increased 0.3 per cent in April, matching market expectations, as growth rebounded in sectors including wholesale trade and manufacturing, and the economy likely expanded further in May, data showed on Friday.
Analysts polled by Reuters had forecast a 0.3 per cent GDP growth in the month, after zero growth in March.
The growth in April, fastest since the 0.5 per cent in January, was driven by rebounds in wholesale trade, mining, quarrying, and oil and gas extraction and manufacturing sectors, Statistics Canada said.
In a preliminary estimate for May, Statscan said GDP was likely up 0.1 per cent, as increases in manufacturing, real estate and rental and leasing and finance and insurance were partially offset by decreases in retail trade and wholesale trade.
Friday’s data puts the Canadian economy on track to exceed the Bank of Canada’s second quarter annualized growth forecast of 1.5 per cent. GDP rose 1.7 per cent in the first quarter, falling short of the bank’s 2.8 per cent growth rate projection.
In April, growth was recorded in 15 out of 20 sectors.
Retail trade, helped by food and beverage retailers and gasoline stations, was another top contributor of growth in April after two consecutive monthly declines, Statscan said. Construction and real estate and rental and leasing were among sectors that weighed on growth in the month.
Overall, both goods-producing and services-producing industries grew by 0.3 per cent in April.
The central bank trimmed its key policy rate for the first time in more than four years earlier in June, and said more cuts were likely if inflation continued to show it was on a sustainable path back down to the 2 per cent target.
Latest inflation data, however, showed consumer prices unexpectedly rose in May, prompting money markets to lower bets of a rate cut in July to about 40 per cent. The next rate announcement is on July 24, before which the bank will have the benefit of one more inflation reading, along with the jobs report for June.
This article was first reported by Reuters
