Canada Economic Forecast
May 31, 2022After gaining momentum in Q4 2021, preliminary data suggests the economy outperformed its G7 peers in Q1, with StatCan estimating growth of 1.4% quarter-on-quarter. Looking at the monthly picture, economic activity growth was muted in January due to Omicron and poor weather affecting energy output. However, momentum picked up in February thanks to healthy expansions in manufacturing and customer-facing services. In particular, the accommodation and food services sector saw a double-digit gain as the Omicron wave faded and associated restrictions were eased. Turning to Q2, available signs are mainly positive. In April, the unemployment rate fell to an all-time low, while the manufacturing PMI was well in expansionary territory and housing starts jumped, boding well for residential investment. However, multi-decade high inflation could be weighing somewhat on spending intentions.
Canada Economic GrowthGrowth will ease in 2022 as interest rates and inflation increase and momentum in the U.S. slows. Nevertheless, a tighter labor market and reduced Covid-19 restrictions will support private spending. Moreover, higher oil and gas prices will buoy government coffers. Uncertainty surrounding possible new Covid-19 variants and fears of recession in the U.S. are risks. FocusEconomics analysts project growth of 4.0% in 2022, which is up 0.1 percentage points from last month. In 2023, our analysts see growth easing to 2.5%.
Canada Economy Data
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|Bond Yield||1.70||1.00 %||Dec 31|
|Exchange Rate||1.30||0.15 %||Jan 01|
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Canada Economic News
January 25, 2023
On 25 January, the Bank of Canada (BoC) raised its target for the overnight rate from 4.25% to 4.50%, and announced it was continuing to reduce the stock of outstanding government bonds. The rate hike was justified by excess demand and inflation which is still over double the upper bound of the Bank’s 1.0–3.0% target range.
January 17, 2023
Inflation dropped to 6.3% in December from November’s 6.8%, slightly below market expectations.
January 1, 2023
The S&P Global Manufacturing Purchasing Managers' Index (PMI) fell to 49.2 in December from November's 49.6.
December 23, 2022
GDP increased 0.1% in month-on-month seasonally-adjusted terms in October, which followed September's 0.2% increase.
December 18, 2022
According to the Teranet-National Bank Composite House Price Index, house prices fell 1.3% month on month in November, following October’s 0.8% decrease.