Canada: GDP growth accelerates to two-year high in July
September 30, 2013
GDP increased a seasonally-adjusted 0.6% in July over the previous month. The figure contrasted the 0.5% contraction tallied in June and slightly beat market expectations of a 0.5% increase. Moreover, the monthly increase is the highest reading in two years. According to Statistics Canada, construction and manufacturing were the sectors with the greatest contribution to the monthly increase.
On an annual basis, GDP rose 1.4% in July, which was above the 1.1% expansion observed in June. The trend was unchanged, with annual average variation in GDP holding at June's 1.3% in July.
According to its July Monetary Policy Report, the Central Bank projects the economy to grow 1.8% in 2013 and 2.7% in 2014. FocusEconomics Consensus Forecast panelists are slightly less optimistic and expect the economy to grow 1.7% in 2013, which is down 0.1 percentage points from last month's estimate. For 2014, the panel expects the economy to expand 2.4%, which is also down 0.1 percentage points from last month's forecast.
Author: Carl Kelly, Economist