Canada’s economy grew in April, in line with advance estimates and analysts’ expectations, Statistics Canada said Friday.
Real gross domestic product (GDP) grew 1.1 percent year-on-year in April. On a monthly basis, GDP grew by 0.3 percent in April, with growth in 15 out of 20 sectors. Analysts polled by Reuters had forecast 0.3 percent growth this month.
The growth was driven by rebounds in wholesale trade, mining, quarrying and oil and gas extraction and production, the federal data agency said. Retail trade was a key driver of growth, led by food and beverage retailers and petrol stations, which posted a decline in March.
Advanced estimates showed GDP rose 0.1 percent in May due to increases in manufacturing, real estate, rents and leases, finance and insurance. Growth was partially offset by declines in retail and wholesale trade, Statistics Canada said.
CIBC economist Andrew Grantham wrote in a note on Friday that the monthly slowdown in May indicates a rebound in inflation in the same month „reflecting supply issues or volatility in the data rather than demand pressures.” The Consumer Price Index (CPI) unexpectedly rose to 2.9 percent in May, while core inflation levels also rose, reducing the odds of a Bank of Canada rate cut in July.
„We continue to look to next week’s employment data, and next month’s CBI data, which will be critical in determining whether the Bank of Canada will cut interest rates by another 25 basis points at its late July meeting,” Grantham wrote.
The data tracked second-quarter growth at an annualized 1.8 percent, above the Bank of Canada’s forecast of 1.5 percent, Grantham said. However, GDP grew by 1.7 percent in the first quarter, against the central bank’s estimate of 2.8 percent
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @aliqjavidaj.
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