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Canadian GDP Slows But Stronger Than Expected

James Boston
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Canadian GDP Slows But Stronger Than Expected

Statistics Canada has taken the opportunity during the quiet North American market period to publish it’s latest official growth figures for the economy. The third quarter growth number in Canada are slightly down on the previous quarter, but this was largely anticipated. On an annualised basis the Canadian GDP figure for Q3 now stands at 2.8%, this is in comparison to the second quarters reading of 3.1%, market forecasts were for a figure of just 2.1% today. The quarter on quarter reading is also correspondingly lower, this has been reported today as 0.7% growth and compares a strong reading of 0.8% during the second quarter, anticipation by markets was for a moderate fall to 0.6% in the latest quarterly figures. Canada also publishes monthly GDP data which although somewhat less reliable than the full quarterly figures does offer a valuable incite into the likely growth trend of the economy. The latest monthly reading, which relates to September, has now recovered to show a reading of 0.4%, this follows a moderately contractionary month of August which presented a negative reading of -0.1%, there was an unofficial expectation of a 0.4% expansion on the monthly GDP indicator in Canada today.

Growth predictions for the full year for the Canadian economy still remain strong. The International Monetary Fund (IMF) last month published in’s World Economic Outlook report a projection of 2.3% for the full 2014 year and 2.4% for 2015 for the country. There have however been significant concerns building that Canada would be unable to meet these targets due to the recent downturn in commodity prices, particularly oil. Comments yesterday by an IMF economist seem to hint that the institution feels it unnecessary to apply any downgrade to it’s Canadian growth forecasts in the near term. The IMF is of the opinion that stronger than expected activity in the US, Canada’s main trading partner, will now be sufficient to offset the commodity driven weakness in the Canadian economy.

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