‘No urgency’ for Bank of Canada to cut rates as economy skirts recession
The national economy managed to skirt a technical recession in 2023, according to Statistics Canada.
Annualized growth for real gross domestic product (GDP) in the fourth quarter remained positive at 1.0 per cent, the agency said Thursday. A rise in exports helped boost the economy while housing and business investment fell.
After the economy contracted in Q3, a positive result for Q4 means that Canada has avoided falling into a technical recession, typically defined as two consecutive quarters of negative growth.
StatCan also revised up its previous estimate for Q3, saying now the economy contracted at 0.5 per cent rather than the steeper 1.1 per cent drop it initially reported.
The Q4 data was above the Bank of Canada’s latest projections, which called for flat growth last quarter. Other economists had expected modest growth in the final quarter of last year, even as the national economy continues to show signs of cooling.
StatCan says outside of 2020, economic growth in 2023 rose at its slowest pace since 2016.
The Canadian economy has slowed under the weight of higher interest rates as consumers rein in spending, slowing sales for businesses.
But so far, the economy has avoided a sharp downturn, as the unemployment rate continues to hover around pre-pandemic levels.
In December, real GDP was flat as goods-producing industries contracted and Quebec’s public sector workers’ strike weighed on growth. A preliminary estimate suggests real GDP grew by 0.4 per cent in January.
Canada’s economy is “just grinding forward,” BMO chief economist Doug Porter said in a note to clients on Thursday, citing a particular boost in exports tied to strong spending trends from the United States. But he also said that growth is
Read more on globalnews.ca
