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Statistics Canada today reported real gross domestic product growth of 2.9% (annualised) in the fourth quarter of 2013, showing acceleration from the 2.7% seen in the previous quarter. The consensus estimate from a Bloomberg poll of analysts was for growth to slow to 2.6%.
The month of December was plagued by terrible weather, with GDP dropping 0.5% that month, but despite this, the momentum of the Canadian economy was greater in 2013 than expected, with Statistics Canada also revising growth data higher for the first two quarters in 2013.
That takes Canadian GDP growth for 2013 as a whole to 2.0%, up from the 1.7% seen in 2012.
Final domestic demand grew 0.3% in the fourth quarter and exports grew 0.4%, which suggests the slack in the economy, referred to in the past by Bank of Canada Governor Stephen Poloz, is beginning to disappear. There had been some speculation that the BoC might be considering a rate cut in order to boost growth, but the better-than-expected GDP growth makes this now look like a very remote chance. The Bank of Canada’s next rate announcement is this coming Wednesday.
By late afternoon in New York, USD/CAD was down 0.48% at 1.1068.