Canada: Economic growth expands the most since Q3 2011
May 31, 2013
In the first quarter, GDP increased at a seasonally-adjusted annualized rate (saar) of 2.5% over the previous quarter. The result came in well above the 0.9% expansion recorded in the fourth quarter and slightly above market expectations of a 2.3% increase. The reading also marks the strongest growth rate in six quarters.
On the domestic side, private consumption grew 0.9% in the first quarter (Q4 2012: +2.2% quarter-on-quarter saar), while government consumption was stable at the 2.0% recorded in the previous quarter. Meanwhile, fixed investment contracted 1.1% (Q4: +2.8% qoq saar).
Exports of goods and services jumped from a 0.8% rise in the fourth quarter to a 6.2% expansion in the first, which marks the strongest reading since Q4 2011. Imports also swung from a 3.1% decline in Q4 to a 1.2% increase in Q1 2013. As a result, the contribution from net exports to overall economic growth improved from plus 1.3 percentage points in the fourth quarter to plus 1.5 percentage points in the first.
According to its April Monetary Policy Report, the Central Bank projects the economy to grow 1.5% this year and 2.8% in 2014. FocusEconomics Consensus Forecast panellists are slightly more optimistic and expect the economy to grow 1.7% in 2013, which is unchanged from last month's estimate. For 2014, the panel expects the economy to expand 2.5%.