Canadian Economy Grows 0.5% in May

Jul 31, 2018

Growth in the Canadian economy accelerated in May, data on Thursday showed, bolstering expectations that the country’s central bank will follow July's interest rate hike with another before the year is out.

Canada’s gross domestic product increased 0.5% in May, Statistics Canada said, up from 0.1% a month earlier. Economists had forecast a reading of 0.3%.

On a year-over-year basis, Canadian GDP grew by 2.6%, up from 2.5% in April, beating expectations for growth of 2.3%.

It was the biggest GDP gain in a year, led by mining, oil and gas.

The Bank of Canada raised interest rates by a quarter point earlier this month, its fourth rate hike in 12 months and indicated that there are more hikes to come over the coming quarters.

The BoC said that while mounting trade tensions with the U.S. were a concern, their impact on growth and inflation looked modest so far.