Canada's economy unexpectedly contracts in Q2, cementing rate pause expectations
Reuters
Published Sep 01, 2023 09:56
(Reuters) - Canada's economy was down 0.2% on an annualized basis in the second quarter, lower than analysts' expectations, on declines in housing investment and smaller inventory accumulations, Statistics Canada data showed on Friday.
June's real GDP was down 0.2% compared to May, matching expectations, while July's GDP was likely unchanged, StatsCan said in a flash estimate.
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COMMENT
ANDREW KELVIN, CHIEF CANADA STRATEGIST AT TD (TSX:TD) SECURITIES
"I think it's probably a huge relief for the Bank of Canada because this makes the September decision quite a bit easier… we are looking at not an especially strong hand off into the third quarter. I also think that we're likely to see the GDP growth undershoot the Bank of Canada's forecast for Q3 as well. I think it becomes easy for the bank to say ‘monetary policy is continuing to work and it justifies an on hold stance at this month's meeting’”.
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Written By: Reuters
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