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Canadian Economy Expands 2 Percent in 2013

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Canadian Economy Expands 2 Percent in 2013

The Canadian economy expanded at a faster pace than forecast last year, as output across several major sectors accelerated.

Canada’s gross domestic product expanded 2.9 percent annually in the fourth quarter, despite a weather-induced setback in December, Statistics Canada reported today from Ottawa. The median estimate of economists in a Reuters poll forecast an annual gain of 2.5 percent. Real GDP in 2013 increased 2 percent, the fastest pace since 2011.

Total output in 2013 increased across all major industries except manufacturing. Goods-production rose 1.7 percent, driven by solid gains in mining and natural gas. Manufacturing, which increased 0.8 percent in the fourth quarter, declined 1.6 percent annually. Canada’s service economy expanded 2.1 percent in all of 2013, official data showed.

The full year advance in GDP was 0.3 percentage points higher than what the Bank of Canada had forecast and what Finance Minister Jim Flaherty’s budget introduced earlier this month.

The Canadian dollar, which has experienced a broad sell-off over the past half year, strengthened following the news. In the midday North American session the USDCAD pair was trading 61 pips lower at 1.1066. Canadian foreign trade weakened further in the fourth quarter, a sign the Canadian economy stands to benefit from a weaker currency.

In the United States, the first revision to fourth quarter GDP showed the world’s largest economy expanded 2.4 percent annually in the fourth quarter, down sharply from the original estimate of 3.2 percent.

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