The Canadian economy grew at the start of 2023, meaning higher interest rates from Bank of Canada remain a possibility this year. Read on.
in the fourth quarter, aligning with the Bank of Canada’s prediction that there would be essentially no growth for the first part of 2023.
But some economists observed the fourth-quarter numbers were influenced by an unusually large depletion of inventories, suggesting the economy might still have some spark. That appears to be the case, as many industries that posted declines in December rallied in January.This advertisement has not loaded yet, but your article continues below.for the first time in a year on March 8.
However, policymakers emphasized that they were still worried about inflation and that they would err on the side of getting year-over-year increases in the consumer price index back to two per cent. That means another interest rate increase will be on the table when Macklem and his deputies gather to update policy on April 12.
Faster economic growth will be a concern for the central bank only because it will exert upward pressure on inflation. But policymakers probably will look at these numbers and call it a wash. Their quarterly economic outlook in January predicted a 1.3 per cent annual rate of growth in the fourth quarter, not zero, which is what Statistics Canada’s actual tally produced.Article content
The Bank of Canada’s outlook for growth in the first quarter was 0.5 per cent, and some economists said the January and February monthly figures imply the economy is growing at an annual rate of about 2.5 per cent.
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