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Canada GDP Q1 2022

Canada: GDP growth disappoints in Q1

Economic growth moderated in the first quarter, with GDP increasing 3.1% in seasonally-adjusted annualized terms (SAAR) (Q4 2021: +6.6% SAAR). This was notably below market expectations and those of our panelists, with the undershoot largely linked to a sharper-than-expected decline in exports.

Private consumption increased 3.4% in the first quarter, which was above the fourth quarter’s 1.8% expansion. Spending was likely boosted by a notable fall in the unemployment rate. Public spending growth moderated to 1.8% in Q1 (Q4 2021: +2.3% SAAR) amid the winding-down of pandemic support measures. Meanwhile, fixed investment growth improved to 11.0% in Q1, from the 9.4% increase logged in the prior quarter, led by investment in residential and non-residential structures.

Exports of goods and services contracted 9.4% in Q1 (Q4 2021: +13.6% SAAR), as energy exports fell amid transportation bottlenecks. In addition, imports of goods and services deteriorated, contracting 2.8% in Q1 (Q4 2021: +16.9% SAAR).

Looking to Q2, a flash estimate from Statistics Canada put month-on-month growth in April at 0.2%, with expansions in energy and transport more than offsetting contractions in the housing, manufacturing and construction sectors.

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