Canada GDP rises for third straight month in August; BoC expects 1.1 pct growth this year

Economic growth in Canada rose for the third straight month during the period of August, remaining in line with what markets had initially anticipated and buoyed by a resilient mining, quarrying and oil-and-gas sector.

Canada’s gross domestic product rose to CAD1.68 trillion (USD1.25 trillion) in August from July, data released by Statistics Canada showed Tuesday. That matched market expectations, according to economists at Royal Bank of Canada.

July’s GDP figure was revised to show growth of 0.4 percent, down from an earlier estimate of a 0.5 percent increase, the data agency said. Despite the previous month’s downgrade, the August expansion is likely to bolster expectations for a strong third-quarter rebound after a second-quarter contraction of 1.6 percent, reports said.

The mining, quarrying and oil and gas extraction sector rose 1.4 percent, with the latter rising 0.9% alone. Overall, the output of the country’s goods-producing industries grew 0.7 percent in August, while service-producing industries were roughly unchanged.

The Bank of Canada (BoC) expects the country to grow by 1.1 percent this year, while an increase of 2.0 percent is anticipated in next year and 2018. Meanwhile, the central bank has kept its policy rate unchanged at 0.5 percent, two weeks prior to the release of the data, lowering its economic outlook on weaker-than-expected investment levels and non-resource exports.