However, recent StatCan data shows economic activity is still far below pre-pandemic levels
Canada’s gross domestic product (GDP) performed better than expected in November, according to recent data from Statistics Canada.
StatCan revealed that real GDP, a key factor in determining the country’s interest rates, grew 0.7% in November from October, outperforming the expectations shared in a recent Bloomberg survey of economists which forecast more modest growth of 0.4%.
Read more: Conference Board: Massive deficits, weak public spending, slow economic growth for Canada in 2021
However, StatCan also pointed out that total economic activity was still about 3% below the pre-pandemic levels seen in February.
The agency also revealed that “preliminary information” indicates an estimated 0.3% increase in real GDP for December2020.
Douglas Porter, chief economist at BMO, said that the main message is that the “Canadian economy is dealing with the second round of restrictions much better than anticipated.”
“We still look for a drop in January activity, but that may prove to be the low point,” he said. “With the strong momentum from late last year (growth likely topped 7% in Q4), we now look for about a flat reading in Q1.”
Porter added that BMO was “lifting our 2021 call to 5.0% (from 4.8%) but shaving next year to 4.5% (from 4.8%).”
Meanwhile, the Conference Board of Canada economists Liam Daly and Kiefer Van Mulligen said that StatCan’s announcement of a modest pick-up in November is welcome, but warned that there is still “a long way to go as output remained 3.5% below the level recorded before the onset of the pandemic in February.”
