Canada GDP April 2019


Canada: Economic activity expands faster than expected in April

June 28, 2019

The economy expanded 0.3% month-on-month in April, down from March’s 0.5% increase but beating analysts’ expectations of a 0.1% expansion. According to Statistics Canada, 12 out of the 20 industrial sectors posted gains over the previous month, with the mining, quarrying and oil and gas extraction sector leading the pack thanks to an easing of oil production restrictions. On an annual basis, growth ticked up to 1.5% in April from 1.3% in the month prior.

Commenting on April’s print, Brian DePratto, a senior economist at TD Economics, noted:

“The consensus view is for the Federal Reserve to reduce its policy rate in short order, but today's data highlights that the situation for the Bank of Canada is quite different, underscored by the bid up in the loonie following this report to levels last seen in October. Uncertainty may be elevated, but an upgraded growth forecast is likely to feature in next month's MPR, leaving another 'no change' interest rate decision and a divergence between Canadian and U.S. monetary policy the most likely outcome”.

Growth should pick up notably from Q2 onwards relative to the first quarter of this year, as the energy sector gradually recovers. That being said, growth in 2019 is still expected to come down from 2018. Elevated household debt and debt servicing costs could drag on households’ demand for credit, while a moderating global growth outlook will likely hamper fixed investment.

The Bank of Canada expects economic momentum to ease this year and forecasts growth of 1.2% in 2019 and 2.1% in 2020. FocusEconomics Consensus Forecast panelists see growth of 1.4% in 2019, which is down 0.1 percentage points from the previous month’s forecast, and 1.7% in 2020.

Author:, Economist

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Canada GDP Chart

Canada Monthly GDP April 2019

Note: Month-on-month changes of seasonally-adjusted GDP and year-on-year variation in %.
Source: Statistics Canada (SC) and FocusEconomics calculations.

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