Canada’s gross domestic product grew by 0.3% in April, meeting market expectations. This growth was driven by rebounds in sectors such as wholesale trade and manufacturing. The economy likely continued to expand in May, with preliminary estimates showing a 0.1% increase in GDP.
In April, Statistics Canada reported growth in 15 out of 20 sectors, with notable contributions from retail trade, mining, and oil and gas extraction. Despite this growth, sectors such as construction and real estate and rental and leasing weighed on overall economic performance for the month.
The Bank of Canada had previously projected a 1.5% growth rate for the second quarter, but the April data suggests that the economy may exceed this forecast. In the first quarter, GDP had increased by 1.7%, falling short of the bank’s projection of 2.8% growth.
Following the unexpected rise in consumer prices in May, the likelihood of a rate cut in July has decreased to about 40%. The next rate announcement is scheduled for July 24, after which the bank will have the benefit of one more inflation reading and the jobs report for June to inform its decision-making process.