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Canada: Economic growth slows in Q4

March 3, 2015

In the fourth quarter, GDP increased at a seasonally adjusted annualized rate (SAAR) of 2.4% over the previous quarter. The result came in below the 3.2% expansion recorded in the third quarter but exceeded market expectations of a 2.0% increase.

The slowdown in Q4 was driven by a deceleration in both domestic demand and the external sector. Private consumption grew 2.0% in Q4, which was down from the 2.6% increase seen in the previous quarter. In addition, fixed investment contracted 0.3% in the fourth quarter, which contrasted the 6.4% increase observed in Q3. Contrary, government consumption rebounded from a 0.3% contraction in Q3 to a 2.1% expansion in Q4, thus marking the fastest increase since Q1 2012.

In the external sector, exports of goods and services fell 1.6% in Q4, which was a deterioration over the 8.9% increase seen in the previous quarter. In addition, imports slowed from a 4.2% increase in Q3 to a 1.7% rise in Q4. As a result, the external sector’s net contribution to overall growth deteriorated from plus 1.5 percentage points in Q3 to minus 1.1 percentage points in Q4, which marked the least contribution since Q3 2012.

According to its January Monetary Policy Report, the Central Bank projects that the economy will grow 2.1% in 2015 and 2.4% in 2016. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.2% in 2015, which is down 0.1 percentage points from last month’s estimate. For 2016, the panel expects the economy to also expand 2.2%.


Author:, Senior Economist

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Canada GDP Q4 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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