Investing.com - The Canadian economy expanded in August, according to official data released on Wednesday.
Canada’s gross domestic product, or the broadest measure of goods and services produced in an economy, increased 0.1% in August from the previous month, Statistics Canada said.
The result was above economists’ expectations for a flat reading.
On a year-over-year basis, the Canadian economy expanded 2.5% in August, compared to expectations for an expansion of 2.4%.
The data supported expectations for the Bank of Canada to continue raising interest rates.
The BoC hiked rates by a quarter point at its meeting Oct. 23, to 1.75%, its fifth increase since the summer of 2017, but still below its “neutral” rate of 2.5% to 3.5%.
The central bank has said that more hikes will be needed to reach its inflation target.
“Even with last week’s increase ... monetary policy remains stimulative. In fact, the policy rate today is still negative in real terms, that is, once you adjust for inflation,” Bank of Canada Governor Stephen Poloz told legislators on Tuesday.
“The policy rate will need to rise to neutral to achieve our inflation target,” he added.
The overall rate of inflation rose less than expected in September, with the consumer price index rising 2.2%, according to data released in mid-October. That was above the BoC 2% inflation target.