ECONOMY

Canada’s Economy Reports Surprise 0.1% Gain in August

The central bank of Canada raised its policy rate this week by 50 basis points to 3.75 per cent.

On Friday, Statistics Canada said that the Canadian economy grew by 0.1 per cent in August, buoyed by strong agricultural and retail activity. It further said that the third quarter annualised GPD has seen up 1.6 per cent.

Analysts had forecast GDP would be flat in August. The flash estimate for annualised GDP is slightly above the Bank of Canada’s Q3 forecast of 1.5 per cent growth.

The central bank of Canada raised its policy rate this week by 50 basis points to 3.75 per cent. It said it was approaching the peak of its tightening campaign, though it was still there.

Statscan (Statistics Canada) said a rebound in services in August partially counterbalanced a decline in goods-producing industries. The retail trade sector grew 1.2 per cent on higher sales at the gas pump, grocery stores and sporting goods shops.

The agriculture and forestry sector grew 3.9 per cent, led by higher crop production as better growing conditions in Western Canada pushed higher yields.

However, manufacturing sector output plunged to its lowest level since January. Construction also fell for the fifth month, though building activity remains well above pre-pandemic levels.

The Canadian dollar was trading 0.3 per cent lower at 1.3610 to the greenback or 73.48 US cents.

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