Canada's economic growth slowed in Q4
Last Updated Tue, 28 Feb 2006 10:41:53 EST
CBC News
Canada's economic growth cooled slightly in the fourth quarter as rising imports crimped the expansion.
Statistics Canada said the economy grew at an annualized rate of 2.5 per cent in the fourth quarter, decelerating from the 3.5 per cent pace set during the third quarter.
"Domestic spending remained very strong, rising 1.1 per cent in the fourth quarter," said the federal government agency.
"However, an increasing share of this demand was satisfied through imports, which rose 2.7 per cent, keeping [gross domestic product] growth in check."
The results for the last three months of 2005 were weaker than expected. Economists had been looking for fourth-quarter annualized growth of 2.7 per cent.
In December, monthly output was up 0.4 per cent, after increasing by 0.2 per cent in November and 0.3 per cent in October.
For 2005, GDP increased 2.9 per cent, matching 2004's growth rate.
"It appears that 'all systems are go' for domestic demand, and we look for another year of GDP growth of nearly 3 per cent in 2006," said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.
"With the economy already effectively operating at capacity, this will be strong enough to keep the Bank of Canada in tightening mode, despite the loonie?s relentless strength," he said.
Royal Bank economists expect the Bank of Canada will raise the overnight rate to 4.5 per cent by the third quarter of 2006 from the current 3.5 per cent. |
