What is slowing down Canada’s economy? What is growing?
The manufacturing sector was the largest drag on the economy, followed by utilities, wholesale and trade, and transportation and warehousing. Stats Can said shutdowns at Canada’s two largest railways led to a decline in transportation and warehousing.
A preliminary estimate for September suggests that real gross domestic product grew by 0.3%.
Statistics Canada’s third-quarter estimate is weaker than the Bank of Canada’s forecast of 1.5% annual growth.
Are there any further rate cuts from the Bank of Canada?
The latest economic data points to continued weakness within the Canadian economy, giving the central bank room to chop rates of interest further. However, the extent of this cut remains to be uncertain as there might be way more inflation and economic data available before the Bank of Canada’s next rate of interest decision on December eleventh.
“We don’t think this raises alarm bells for the (Bank of Canada), but it does further highlight its fears of a weakening economy,” wrote TD economist Marc Ercolao.
The central bank has repeatedly acknowledged that the economy is weak and growth needs to choose up. Last week, the Bank of Canada cut rates of interest by half a percentage point in response to inflation returning to its 2 percent goal.
Governor Tiff Macklem would not say whether the central bank will make one other big rate cut in December, but as an alternative said the central bank will make rate of interest decisions one after the other based on incoming economic data.
The central bank expects economic growth to rebound next yr as rate of interest cuts permeate the economy.
