‘Canadian growth is slowing from a blistering end to last year and start of 2017, but is still in healthy enough territory to chew up what’s left of economic slack.’ —Nick Exarhos, CIBC
Canada’s economic output posted the sixth straight month of expansion in April, contributed by improvements in most sectors. Statistics Canada reported on Friday that the country’s GDP rose 0.2% in the fourth month of the year, following March’s 0.5% gain and matching analysts’ forecasts. The increase was mainly driven by services activity, with a 0.5% advance in both retail sales and wholesale trade. The report showed that 14 of 20 sectors expanded in April. On a yearly basis, the Canadian economy expanded 3.3% in the reported month, its strongest growth pace in almost three years. The largest annual increase of 5.6% was registered in the warehousing and transporting sector, supported by a rise in rail transport. Strong data suggested the Bank of Canada would be more optimistic amid the country’s strong economic performance. Moreover, the economy is expected to reach full employment by the end of the year, which is one more reason to lead to a rate hike. Stephen Poloz, the BoC Governor, pointed out that two previous rate cuts did their job and the economy was now on a firmer ground despite lower oil prices.
