| 29 February 2024, Thursday |

Canada’s economy likely grew by 5.6% in first quarter

The Canadian economy grew by 5.6 percent on an annualized basis in the first quarter, as growth in February above expectations and real gross domestic product increased again in March, according to Statistics Canada.

In February, the economy increased by 1.1 percent, beating analyst expectations of 0.8 percent, thanks to broad-based growth as pandemic precautions were eased. According to Statscan’s flash estimate, the GDP gained 0.5 percent in March, marking the tenth consecutive monthly expansion.

The undoing of Omicron-related public health restrictions, imposed in December and January, reversed the fortunes of client-facing industries in February, said Statscan.

The accommodation and food services sector jumped 15.1%, clawing back nearly all the declines of the previous two months. Transportation jumped as people returned to trains and planes, and the arts, entertainment and recreation sector bounced back.

Construction expanded again, while the real estate sector gained on surging home resale activity. Housing demand also buoyed the finance and insurance industry, as home buyers rushed to lock in mortgages ahead of rate increases.

The strong February results and first-quarter estimate will likely reinforce bets the Bank of Canada will go ahead with another supersized rate rise on June 1. It made a rare 50 basis point increase earlier this month.

  • Reuters