OECD Says Canadian Winter Bad For Economy

The harsh Canadian winter is playing havoc with the economy, but the OECD expects something of a rebound in the second quarter of the year.

“The United States and Canada are both also expected to experience an uneven pattern of growth in the near term, owing in part to the disruptive effect of repeated episodes of severe winter weather,” the Organization for Economic Co-operation and Development said today in its interim economic assessment.

“A number of activities were restrained by the storms and cold temperatures, which is likely to depress first-quarter GDP, with some bounce-back effect in the second quarter in the absence of further negative shocks.”

Canadians are, of course, used to wretched winters, but this one has been particularly ugly, as the OECD noted.

In its new report, the group forecasts first-quarter economic growth of just 0.5 per cent in the current quarter, but, given “one-off factors,” could not update its projection for the second quarter.

In November, it forecast second-quarter growth at 2.4 per cent.

According to the latest reading by Statistics Canada, the economy expanded in the fourth quarter at an annual pace of 2.9 per cent, though contracted 0.5 per cent in December, the month of an ice storm.

via Globe & Mail

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza