Canada GDP


Canada: Economic growth slows in Q3, but beats expectations

November 27, 2014

In the third quarter, GDP increased at a seasonally adjusted annualized rate (SAAR) of 2.8% over the previous quarter. The result came in below the 3.6% expansion recorded in the second quarter but exceeded market expectations of a 2.1% increase.

The slowdown in Q3 was driven by a deceleration in both domestic demand and the external sector. Private consumption grew 2.8% in Q3 (Q2: +4.4% quarter-on-quarter SAAR) and government consumption swung to a 0.1% contraction (Q2: +1.2% qoq SAAR). However, fixed investment accelerated from a 3.1% rise in Q2 to a 5.3% expansion in Q3, which marked an over two year high.

In the external sector, exports of goods and services decelerated rapidly from a 19.0% expansion in Q2 to a 6.9% increase in Q3. Imports also slowed, falling to a 4.0% expansion from the 9.8% increase recorded in Q2. As a result, the external sector’s net contribution to overall growth decreased from 2.7 percentage points in Q2 to 0.9 percentage points in Q3.

According to its October Monetary Policy Report, the Central Bank projects that the economy will grow 2.3% in 2014 and 2.4% 2015. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.3% in 2014, which is unchanged from last month’s estimate. For 2015, the panel expects the economy to expand 2.6%, which is also unchanged from the previous month’s forecast.

Author: Angela Bouzanis, Senior Economist

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Canada GDP Chart

Canada GDP Q3 2014

Note: Quarter-on-quarter changes of seasonally adjusted annualized GDP and year-on-year variation in %.
Source: Statistics Canada (SC) and FocusEconomics Consensus Forecast

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