After stalling in the fourth quarter of 2022, economic growth rebounded in the opening months of this year, buoyed by strong exports and robust consumer spending. That momentum appears to have continued into April, with a preliminary estimate from Statistics Canada showing stronger-than-expected growth that month despite the economic impact of the federal workers’ strike.
The GDP numbers, published Wednesday, are the latest upside surprise for the Canadian economy. Despite eight consecutive interest rate increases in 2022 and early 2023, consumers continue to spend and businesses continue to hire workers, keeping the unemployment rate near a record low. The housing market fell into a deep funk last year, but recent data shows a pick-up in real estate activity.
“The run of sturdy data undoubtedly raises the odds that the Bank of Canada needs to go back to the well of rate hikes, and even puts some chance on a move as early as next week’s policy decision,” Bank of Montreal chief economist Douglas Porter wrote in a note to clients. Canadian consumers were the engine of economic growth in the first quarter. Household spending rose 1.5 per cent on goods and 1.3 per cent on services, quarter-over-quarter, driven by increased vehicle purchases and a jump in spending on food and travel.
The Bank of Canada and Bay Street forecasters expect the economy to slow throughout the remainder of 2023. Many predict a mild recession in the second half of the year, as more Canadians renew their mortgages at higher rates, leaving them with less money for discretionary spending.
Finance Finance Latest News, Finance Finance Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: CTVCalgary - 🏆 26. / 68 Read more »
Source: BNNBloomberg - 🏆 83. / 50 Read more »
Source: YahooFinanceCA - 🏆 47. / 63 Read more »