Growth has slowed in Canada in 2018

La croissance a ralenti au Canada en 2018

Photo: John Raoux Associated Press

Canada has posted its weakest quarterly growth since mid-2016, reported Friday by Statistics Canada.

The canadian economy grew at a pace of annualized 0.4% during the last three months of 2018, with the country having posted its weakest quarterly growth since mid-2016, reported Friday by Statistics Canada.

The most recent data from the agency on real GDP show that, for the whole of last year, the canadian economy posted a growth of 1.8 %, compared to 3 % in 2017. The 0.4% increase recorded in the fourth quarter was lower than the 2% growth recorded in the previous quarter.

“I think we are witnessing the confirmation of a trend with respect to a deceleration in economic, but we see that it manifests itself much more quickly,” noted Brian DePratto, chief economist at TD Bank. Mr. DePratto and other analysts have predicted Friday that figures to be more modest going to come in the next few months, because the reductions of oil production in Alberta, at the beginning of the year, will not be felt until the next release of quarterly data. “All of this suggests […] that we could have another quarter of stagnation, with a very, very low growth”,-he said.

Statistics Canada also released revisions to the downside for the first half of 2018, which have reduced growth in the second quarter to 2.6 % and that of the first quarter to 1.3 %. Initially, these increases were estimated to be 2.9 % and 1.7%, respectively.

“The word that begins with “R” will remain in the minds, because the canadian economy has narrowly avoided a beginning of a recession in [the fourth quarter], ” wrote the chief economist of CIBC, Avery Shenfeld, in a research note. “If it were not for the huge gain in employment in January, we craindrions a recession in good and due form, but at this stage, one can speak of an engine failure. “

Mr. DePratto noted that, by eliminating the figures relating to the trade and inventory — which, according to him, are not necessarily of the pure indicators of the health of the economy — Canada has now experienced a second quarter of contraction. “It is necessary to return to the beginning of 2015 to see such a contraction in two successive quarters “, he observed. In December, the economy contracted 0.1% for a second consecutive month. It was also his third decline in four months.

No rate increase in sight

Most observers expect the Bank of Canada leaves its key interest rate unchanged at its next decision on this matter scheduled for next week. With the report of Friday, some are now wondering if the governor of the central bank, Stephen Poloz, will dare to raise the key rate this year — or even if the next change in rate will be really higher. “It seems that the Bank of Canada will remain very quiet for a very long time,” said the chief economist of the Bank of Montreal, Douglas Porter, in a research report.

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