Canada’s gross domestic product (GDP) rose for a ninth consecutive month in February, rising 0.8% as pandemic restrictions across the country continued to ease.
February’s advance was stronger than the 0.2% growth recorded in January, according to Statistics Canada. The latest data shows that the economy was resilient to start the year despite COVID-19 restrictions meant to contain the spread of the Omicron variant.
Canada’s economy is on track to grow at an annualized rate of more than 4% in the first quarter, which is twice the pace the Bank of Canada had projected as recently as this January. Central bank officials estimate the country was already at full capacity at the end of last year, after the economy grew at an annualized 6.7% in the fourth quarter.
The Canadian dollar was little changed after the latest GDP report, trading at $1.2520 per U.S. dollar in Toronto.
In February, economic growth was led by the manufacturing sector, oil and gas extraction, food services, and construction, Statistics Canada said. In all, nine out of 20 industrial sectors expanded.
Some economists now expect robust growth, with strong consumption trends, a hot job market, and broadening price pressures. That could prompt the Bank of Canada to be more aggressive in its interest rate increases to slow inflation that it is running at a 30-year high in Canada.
Bank of America (BAC) and Citigroup (C) are each forecasting a 50 basis-point rate hike at each of the next three meetings of Canada’s central bank.
