The Toronto skyline in Canada

Canada GDP February 2023

Canada: Economic activity growth slows in February, but strong outturn expected for Q1 as a whole

GDP expanded 0.1% in month-on-month seasonally-adjusted terms in February, which was a deterioration from January’s 0.6% increase and undershot the flash estimate of 0.3% growth. A contraction in manufacturing activity and slowdowns in mining and services—with particular weakness in wholesale, retail and transport services—were behind the headline reading.

On an annual basis, monthly GDP increased 2.5% in February, which was below January’s 3.2% expansion.

For March, the statistics office published a flash GDP estimate of -0.1% month on month, which would take the quarter-on-quarter expansion over Q1 as a whole to a robust 2.4% in annualized terms.

On the implications for monetary policy, TD Economics’ Marc Ercolao said:

“[The] GDP numbers corroborate the BoC’s recent guidance that monetary policy may need to be ‘restrictive for longer’. This doesn’t necessarily mean additional rate hikes are on the table, but it does provide further evidence that the start of rate cuts are less likely to occur in 2023. Our view is that the BoC will hold the policy rate into 2024 as lagged effects of interest rate hikes still need time to work their way through the economy.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest