Economic Update from the Canadian Chamber ...

November 30, 2005

30 November 2005

Economic Update from the Canadian Chamber of Commerce

The following analysis comes from the Canadian Chamber of Commerce.

Canadian real GDP grew at a solid annualized pace of 3.6% in the third quarter of 2005, a slight acceleration from the 3.4% rise in the second quarter. The increase was consistent with market expectations. Buoyant business investment (+8.7%) and net exports (exports grew by 10.4% while imports rose by 9.2%) were the main drivers behind today's number. As expected, consumer spending was up a more modest 2.4%. Inventory accumulation slowed in the quarter and acted as a slight drag on growth yet again. …

In its October 2005 Monetary Policy report, the Bank of Canada had predicted real GDP growth for the third quarter of 3.0%. Today's GDP report shows that the economy grew at a much faster rate than what Canada's central bank had anticipated. With the economy operating at full capacity, a record low unemployment rate, growth in wages continuing to accelerate and labour shortages reported across the country, further interest rate hikes by the Bank of Canada are in the cards. Thus, look for a 25 basis points increase on December 6 which will take the overnight rate to 3.25%.


Topic(s): 
Canadian Economy & Politics
Information Source: 
Canadian News Channel
Document Type: 
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