Canada's economy grows more than expected, dodging recession

financialpost.com:

The Canadian economy has dodged a recession as gross domestic product edged up in the fourth quarter last year, primarily due to higher exports of crude oil and reduced imports, making it likely the Bank of Canada will stick to its plan of holding interest rates when it makes its next announcement on March 6.

Real GDP rose by an annualized one per cent for the three months ending Dec. 31, compared to the consensus of 0.8 per cent, following a 0.5 per cent decline in the third quarter, according to Statistics Canada. The agency had originally said GDP declined by an annualized 1.2 per cent in the third quarter.

GDP rose for the third consecutive year since 2020, when the COVID-19 pandemic led to a contraction, but at its slowest pace since 2016, not counting 2020. Advance information indicates real GDP rose 0.4 per cent in January, Statistics Canada said.

Not everything was relatively rosy. Final domestic demand, which is composed of expenditures on final consumption and gross fixed-capital formation, dropped 0.2 per cent in the fourth quarter, after a 0.2 per cent increase in the previous quarter.

“Growth appears to have been driven largely by an easing of previous supply constraints helping exports and car sales, rather than necessarily an improvement in domestic demand,” Andrew Grantham, an economist at CIBC Capital Markets, said.

He continues to predict the Bank of Canada’s first interest rate cut will take place in June.

TD Economics senior economist James Orlando said the economy “showed some life” in the final quarter with consumers, who had pared back on spending for much of the year, deciding to be busy “driving around in their new cars and filling shopping malls during the holiday season.”

He said a return to