Canadian Real GDP Growth

Canadian Q2 Real GDP Growth - August 31, 2012

The Canadian economy expanded 1.8 per cent in the second quarter of 2012, following similar growth in the first quarter. Growth was driven by a 7.2 per cent increase in business investment and an 11.4 per cent bounce in nonresidential investment.

Other sectors of the economy showed moderate growth with consumer spending growing just over 1 per cent while residential investment slowed considerably compared to previous quarters. Cuts to Government spending and a deterioration in Canada's trade balance subtracted from growth in the second quarter. 

Economic growth last quarter was slightly weaker than the Bank of Canada forecast and we are forecasting growth for the balance of the year to hold close to 2 per cent.  Given modest growth and stable inflation, we expect the Bank to hold its overnight target rate at 1 per cent through the remainder of 2012 before testing the water with a 25 basis point increase in early 2013. 

For more information, please contact: 

Cameron Muir
Chief Economist
Direct: 604.742.2780
Mobile: 778.229.1884

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