Canadian economy grows slower than expected in the fourth quarter
Canada’s economy nearly ground to a halt in the last three months of 2018, expanding at an annualized pace of 0.4 per cent in the fourth quarter, Statistics Canada said Friday, marking the worst quarterly performance in two and a half years.
Canada’s GDP came in well below economist expectations of a one per cent annualized expansion, with consumption growing at the slowest pace in almost four years, housing slumping the most in a decade and business investment falling for a second straight quarter.
Here’s a look at how economists are reacting to Canada’s fourth-quarter GDP report:
“The ‘R’ word will be on minds as Canada's economy barely skirted the start of a recession in Q4 … If not for a huge employment gain in January we'd be worried about an outright recession, but at this point, it’s best described as a stalled engine.”
- CIBC Capital Markets Managing Director and Chief Economist Avery Shenfeld
“Ouch. We were expecting a sub-one-per-cent report, but this report still managed to disappoint given the weak composition within the sectors. Put simply, it is never a good sign when an inventory build and import contraction are the factors keeping growth above water.”
- TD Economics Senior Economist Brian DePratto
“There really isn’t much good to say about this report, with a variety of disappointments, in both the headline and the details…With oil production cuts now about to land on the early-2019 results, we can’t look for a quick turn in overall growth. Instead, we’ll have to wait for spring for the economy to pull out of its lengthy hibernation in Q4 and Q1. Accordingly, the Bank of Canada also looks to stay very quiet for very long.”
- BMO Financial Managing Director and Chief Economist Doug Porter
“On the basis of this latest set of woeful GDP figures, the Bank of Canada must surely be considering following the Fed and abandoning any talk of further interest rate hikes at next week’s policy meeting.”
- Capital Economics Chief North America Economist Paul Ashworth