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Canadian GDP Contracts in Q3

Published Nov 30, 2023 10:10
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By Ketki Saxena

Investing.com -- Statistics Canada reports that the Canadian economy shrank Q3, as household spending stayed flat and exports declined.

The Q3 annualized reading showed a 1.1% decline, significantly lower than the 0.2% advance that had been expected.

On a quarterly basis, the reading declined 0.3%, contracting from a 0.3% gain in Q2.

On a monthly basis, GDP edged up 0.1% MoM in September. 

On a positive note, the Q2 reading was revised higher, to +1.4% on a quarterly basis from -0.2%. 

So, is the Canadian economy in a recession? 

James Orlando, Director & Senior Economist at TD (TSX:TD) economics notes, “Well, it's not a technical recession, but it's not good either. While the Canadian economy contracted more than expected in the third quarter, the upward revision to Q2 and the positive flash estimate for October should ease some recession concerns.”

Looking ahead for the Bank of Canada, Orlando expects the BoC to stay on the sidelines as economic growth remains stalled. 

Orlando notes, “We expect below trend economic growth to continue over the coming months, which will push inflation gradually closer to the 2% target. This will give the BoC a few months before it starts to prepare markets for rate cuts, which we expect will start in April 2024.”



Canadian GDP Contracts in Q3
 

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Comments (1)
George Thorm
George Thorm Nov 30, 2023 13:41
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Not surprised, but bet the Canadian central bank is though, lol
 
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