Robb Stewart of The Wall Street Journal reports that the country’s recent sluggish GDP report is one of the last major indicators before the Bank of Canada’s December policy decision. Stewart writes:
Canada’s economy made a sluggish start to the final months of the year after growth cooled in the third quarter, reigniting debate over whether the central bank may opt for another outsize rate cut in December.
Household spending in the country looks to have responded to earlier reductions in borrowing costs but business investment has weakened and the economy broadly has shifted down a gear. This comes even with rapid immigration-driven population growth, traditionally a boost to economic performance.
Gross domestic product rose at annualized rate of 1% in the July-to-September period, Statistics Canada said Friday. That marked a slowdown from the previous quarter’s upwardly revised growth of 2.2% and undershot the roughly 1.5% expansion forecast by the Bank of Canada. […]
“Canada’s economic engine is not exactly in fine shape,” said LJ Valencia, an economic analyst at Desjardins, who nevertheless noted there may be less slack in the economy than previously assumed given upward revisions to GDP growth for recent quarters. Valencia anticipates a quarter-point cut next month, one of five cuts expected from the central bank to counteract pressures on the economy.
Read more here.
