Canadian real GDP edged up by 0.1 per cent in October, following a 0.2 per cent increase in September. Growth in services-producing industries (+0.3 per cent) offset declines in goods-producing industries (-0.7 per cent) as real GDP grew in 11 of 20 subsectors. Canadian real GDP is now roughly 2.9 per cent above its pre-pandemic, February 2020 level. Preliminary estimates suggest that output in the Canadian economy grew again by 0.1 per cent in November.
Recent GDP growth figures, while not strong, have tended to outpace expectations. With 0.1 per cent increases expected for October and November, at this rate fourth quarter GDP growth could come in at an annualized rate of around 1.2 per cent. This would be well-above the Bank of Canada's forecast of 0.5 per cent for Q4 as of the October monetary policy report. Alongside higher than expected core CPI figures released Wednesday, today's GDP figures could make it more challenging for the central bank to avoid an additional rate hike at its meeting on January 25th.
For more information, please contact: Gino Pezzani.