Canadian May GDP Rose 0.6%, Vindication For Bank of Canada Rate Hike

Paterniano Del Favero
Luglio 28, 2017

Statistics Canada reported that Canada's real gross domestic product jumped 0.6 per cent in May from April, on a seasonally adjusted basis - triple the solid 0.2-per-cent growth that economists had predicted. That matched the strongest single-month growth that the economy has posted in the past six years.

Real estate, rental and leasing shrank by 0.2 per cent.

"The big surprise was a massive 13 per cent snapback in. oilsands, which alone accounted for half of the rise in GDP", Bank of Montreal economist Doug Porter said. "The robustness of the Canadian economy will likely allow the Bank of Canada to carry through with another interest rate increase this fall, completing the removal of the 2015 emergency stimulus". It's also bouncing back from earlier this year, when a major Syncrude upgrader was knocked offline by a fire.

Goods-producing industries led the way.

Manufacturing expanded 1.1% for the quarter, but there was a decline in construction activity.

The strong showing blew past what economists were expecting, which was modest growth of 0.2 per cent for the month. And the arts and entertainment industry fell 3.5 per cent, largely because several of Canada's National Hockey League teams were eliminated from the Stanley Cup playoffs.

Over the past year, Canada's economy has expanded by 4.6 per cent, the fastest pace seen since the end of the 1990s dot-com boom. Many economists are now looking at second-quarter GDP growth of about 3.5 per cent annualized - well above the Bank of Canada's mid-July estimate of 3 per cent, and almost matching the first quarter's impressive 3.7 per cent pace.

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