Canada: Canadian economic growth unchanged in Q2
August 31, 2012
In the second quarter, GDP increased 1.8% in seasonally adjusted annualized terms over the previous quarter. The result was unchanged from the first quarter's figure (previously reported: +1.9% quarter-on-quarter saar) and came in above market expectations of a 1.6% expansion. The stable growth in the second quarter mainly reflected how an acceleration in the domestic sector was offset by a deterioration in the external side of the economy. Private consumption accelerated from a 0.7% increase in the first quarter to a 1.1% rise in the second, while government consumption, on the other hand, declined 0.5% (Q1: -2.1% qoq saar). Meanwhile, business fixed investment decelerated from a 7.9% expansion in the first quarter to a 6.5% rise in the second. That said, GDP growth in the second quarter was positively affected by a build-up in inventories. Meanwhile, exports of goods and services decelerated notably, expanding only 0.8% in the second quarter (Q1: +4.0% qoq saar). Imports, on the other hand, accelerated from a 5.2% rise in the first quarter to a 6.4% expansion in the second. As a result, the contribution from net exports to overall economic growth deteriorated from minus 0.9 percentage points in the first quarter to minus 2.7 percentage points in the second.