Canada: Economy maintains momentum in the first quarter
June 1, 2012
In the first quarter, GDP increased 1.9% in seasonally adjusted annualized terms over the previous quarter. The result was unchanged from the fourth quarter's figure (previously reported: +1.8% quarter-on-quarter saar) and came in line with market expectations. The stable growth in the first quarter mainly reflected how an acceleration in the domestic sector was offset by a deterioration in the external side of the economy. Private consumption decelerated from a 2.8% increase in the fourth quarter to a 0.9% rise in the first, while business fixed investment accelerated from a 4.2% expansion in the fourth quarter to a 7.6% increase. Government consumption, on the other hand, declined 1.7% (Q4 2011: +0.4% qoq saar). GDP growth in the first quarter was also positively affected by a build-up in inventories. Meanwhile, exports of goods and services decelerated sharply, expanding only 2.5% in the first quarter (Q4 2011: +7.2% qoq saar). Imports, on the other hand, accelerated from a 2.3% rise in the fourth quarter to a 4.4% expansion in the first. As a result, the contribution from net exports to overall economic growth swung from plus 1.4 percentage points in the fourth quarter to minus 1.1 percentage points in the first.