The Canadian economy grew slightly in July with the latest reading on real gross domestic product coming in higher than expected.
Statistics Canada said Thursday that the economy grew by 0.1 per cent in July, outperforming its preliminary estimate that pointed to a contraction of 0.1 per cent.
The federal agency said growth in the goods-producing industries was partially offset by a decline in the services-producing industries.
(Sponsored)
Family-owned Coke Canada Bottling investing to grow in Ottawa-Gatineau
Have you ever wondered where your favourite Coca-Cola products come from? Few people in know that over 300 popular beverages products, like Coca-Cola, Coke Zero, Fuze, Fanta, Monster Energy, A&W
DYMON and The Ottawa Mission celebrate record-breaking Giving Tuesday success
The Ottawa Mission is celebrating a historic Giving Tuesday after raising more than $1.1 million in support of people experiencing homelessness, hunger, and poverty — the most successful Giving Tuesday
The retail sector along with food and accommodation services shrunk. The contraction in these industries may mean high inflation and interest rates are affecting consumers more broadly, said CIBC senior economist Andrew Grantham in a note.
As the Bank of Canada continues to raise interest rates to tame inflation, an economic slowdown is widely anticipated.
Some banks are forecasting the economy grew at an annualized rate of around one per cent in the third quarter.
For comparison, the economy grew at an annual rate of 3.3 per cent in the second quarter.
The Bank of Canada is expected to raise its key interest rate again in October as inflation remains well above its two per cent target.
“Policymakers are likely to press ahead with another rate hike next month,” Grantham said. “However, signs of consumer spending weakening even in some service industries should see the bank then take a pause.”
The annual inflation rate in August was 7.0 per cent.
Statistics Canada notes the mining, quarrying, oil and gas sector grew by 1.9 per cent in July, following slight declines in the two previous months.
The agriculture, forestry, fishing and hunting sector also grew as crop production increased.
Meanwhile, manufacturing and wholesale trade posted declines.
The latest reading follows similar growth in June, when the economy expanded by 0.1 per cent.
A preliminary estimate for August indicates real GDP for that month was essentially unchanged.
