New GDP figures exceed expectations
The Canadian economy expanded in 2023’s fourth quarter, growing at an annualized rate of 1.0% as gross domestic product (GDP) also likely ticked up in January.
New data released on Thursday by Statistics Canada showed that the economy’s fourth-quarter performance exceeded the expectations of both the Bank of Canada and analysts surveyed by Reuters, while GDP probably inched upwards by 0.4% last month.
The Bank of Canada had expected the economy to remain flat in Q4, while the Reuters poll revealed expectations of 0.8% growth.
The new figures only reinforce the overwhelming likelihood that the central bank will hold its benchmark interest rate steady in next week’s decision, scheduled for March 6.
Real GDP remained largely unchanged in December, failing to hit expected growth of 0.2%, but the data shows a strong rebound in the economy’s quarterly performance following a GDP contraction in Q3.
A rise in exports helped contribute strongly to growth in the final quarter of the year, counteracting a dip in imports and lower business investment.
While the economy has posted a mixed performance in recent months, its resilience has fuelled optimism that the Bank of Canada will achieve a so-called “soft landing” – bringing inflation to its 2% target without plunging the country into a recession.
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