Canada Q2 annualized GDP most likely grew 4.6%, higher than BoC forecast

·1 min read
FILE PHOTO: The financial district of Toronto

OTTAWA (Reuters) - The Canadian economy most likely grew at an annualized rate of 4.6% in the second quarter over the first, above the Bank of Canada's projection, Statistics Canada said in a flash estimate on Friday.

Statscan said the economy was essentially unchanged in May when growth in service-producing industries was offset by a decline in goods-producing industries. Analysts had expected the economy to shrink by 0.2% in May from April.

June likely expanded 0.1% versus May on higher output in the construction, manufacturing and accommodation and food services sectors, according to a flash estimate.

The central bank forecast on July 13 that annualized growth would hit 4.0% in the second quarter, up from 3.1% in the first.

That same day, the bank raised its main interest rate by 100 basis points in a bid to crush inflation, its biggest hike in 24 years, and said more increases would be needed. The bank says it wants to front-load its tightening to avoid a recession.

The Canadian dollar dipped slightly to C$1.2851 to the U.S. dollar, or 77.81 U.S. cents, from C$1.2836 to the U.S. dollar, or 77.91 U.S. cents before the release.

(Reporting by David Ljunggren and Steve Scherer in Ottawa; Editing by Nick Macfie)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting