ZCZC
BCN-23
CANADA-ECONOMY-GDP
Canada economy grew 2.9 percent in second quarter
OTTAWA, Aug 31, 2018 (BSS/AFP) – Canada’s economy grew at an annual rate
of 2.9 percent in the second quarter, lifted by a rise in exports and
services, the national statistical agency said Thursday.
The increase was slightly less than expected by analysts, who had
projected growth of three percent during the three months ending June 30.
Growth was mainly driven by an increase in export volumes — up 2.9
percent and the largest gain in four years, according to Statistics Canada.
Exports in the quarter were led by energy products. Foreign sales of
pharmaceutical products and business jets also contributed to the rise and
the outpacing of a small uptick in imports.
Consumer spending was also up, largely due to higher housing and utility
costs (water, electricity and gas), reversing a downward trend over the
previous three quarters.
Business investments, however, slowed in the quarter.
These figures “are enough reason for the Bank of Canada to wait until
October to hike (its key lending rate) again,” CIBC Economics analyst Avery
Shenfeld said, “particularly if we don’t get a clear and favorable outcome to
NAFTA and the tariffs on steel/aluminum are left in place.”
The central bank hiked its benchmark rate to 1.5 percent in July — its
highest level in a decade, following a previous rate increase in January.
Canadian trade negotiators were in Washington on Thursday seeking a
breakthrough in talks to revamp North American Free Trade Agreement (NAFTA),
after the US announced on Monday a deal with Mexico.
US President Donald Trump has threatened to impose tariffs on Canadian
automobiles and parts if an agreement is not reached soon, and has made the
removal of steel and aluminum tariffs conditional on that outcome.
Optimism has picked up after Canada signalled a deal was possible by
Friday.
BSS/AFP/HR/0958