Canada’s Economy Grows 1% in Q3, Falling Short of Bank of Canada’s Forecast
Ottawa: Canada’s economy expanded by 1% in the third quarter of 2024, missing the Bank of Canada’s October forecast of 1.5%, according to newly released data from Statistics Canada.
The modest growth reflects a slowdown in key sectors, including housing and exports, amid rising borrowing costs and global economic uncertainties. The performance marks a deceleration from the 1.7% growth recorded in the previous quarter, indicating that higher interest rates may be dampening economic activity.
The Bank of Canada, which has kept interest rates elevated to curb inflation, had anticipated a slightly stronger rebound. However, the weaker-than-expected GDP figures may prompt reassessment of its monetary policy stance in the months ahead.
“Higher interest rates and reduced consumer spending are beginning to weigh on economic growth,” said a senior economist at TD Bank. “While inflationary pressures persist, slower GDP growth suggests the economy is cooling as intended by the central bank’s policies.”
Sectors like energy and agriculture contributed positively to the GDP, while retail trade and housing showed signs of strain. Exports also remained sluggish due to weaker global demand.
The Bank of Canada has indicated it will closely monitor economic data to determine whether further rate adjustments are necessary. Analysts believe the central bank could adopt a more cautious approach, balancing inflation control with supporting economic growth.
With economic headwinds expected to persist, policymakers and businesses alike are preparing for a challenging year ahead.