Canada’s economy expands 0.3% in April; another gain seen in May
2024.06.28 08:51
OTTAWA (Reuters) – Canada’s gross domestic product increased 0.3% in April, matching market expectations, as growth rebounded in sectors including wholesale trade and manufacturing, and the economy likely expanded further in May, data showed on Tuesday.
Analysts polled by Reuters had forecast a 0.3% GDP growth in the month, after zero growth in March.
The growth in April, fastest since the 0.5% in January, was driven by rebounds in wholesale trade, mining, quarrying, and oil and gas extraction and manufacturing sectors, Statistics Canada said.
In a preliminary estimate for May, Statscan said GDP was likely up 0.1%, as increases in manufacturing, real estate and rental and leasing and finance and insurance were partially offset by decreases in retail trade and wholesale trade.
Friday’s data puts the Canadian economy on track to exceed the Bank of Canada’s second quarter annualized growth forecast of 1.5%. GDP rose 1.7% in the first quarter, falling short of the bank’s 2.8% growth rate projection.
In April, growth was recorded in 15 out of 20 sectors.
Retail trade, helped by food and beverage retailers and gasoline stations, was another top contributor of growth in April after two consecutive monthly declines, Statscan said. Construction and real estate and rental and leasing were among sectors that weighed on growth in the month.
Overall, both goods-producing and services-producing industries grew by 0.3% in April.
The central bank trimmed its key policy rate for the first time in more than four years earlier in June, and said more cuts were likely if inflation continued to show it was on a sustainable path back down to the 2% target.
Latest inflation data, however, showed consumer prices unexpectedly rose in May, prompting money markets to lower bets of a rate cut in July to about 40%. The next rate announcement is on July 24, before which the bank will have the benefit of one more inflation reading, along with the jobs report for June.
