THE Canadian economy grew by a surprise 0.1 per cent in August, buoyed by strong agricultural and retail activity, with another 0.1 per cent increase likely in September and third quarter annualised GPD seen up 1.6 per cent, Statistics Canada said on Friday (Oct 28).
Analysts polled by Reuters had forecast GDP would be flat in August. The flash estimate for annualised GDP, which may change when a final tally is released next month, is slightly above the Bank of Canada's third quarter forecast of 1.5 per cent growth.
The central bank increased its policy rate this week by 50-basis points to 3.75 per cent and said it was nearing the peak of its tightening campaign, though it was not there yet.
Statscan said a rebound in services in August partially offset a decline in goods-producing industries. The retail trade sector rose 1.2 per cent, bouncing back from July, on higher sales at the gas pump, at grocery stores and in sporting goods shops.
The agriculture and forestry sector rose 3.9 per cent, led by increased crop production as better growing conditions in Western Canada drove higher yields.
That was offset by a contraction in manufacturing, with sector output falling to its lowest level since January. Construction also declined for the fifth straight month, though building activity remains well above pre-pandemic levels.
The Canadian dollar was trading 0.3 per cent lower at 1.3610 to the greenback, or 73.48 US cents. REUTERS