Canadian Economy Shrinks After Oil Price Drop

October 31, 2014 Share Print 1

Canada’s gross domestic product shrank in August, an unexpected decline led by oil and gas extractors.

Output shrank 0.1 percent to an annualized C$1.63 trillion ($1.45 trillion), Statistics Canada said today in Ottawa, while the median forecast in a Bloomberg economist survey with 20 responses was for output to be little changed from July.

Oil and gas extraction declined by 2.5 percent to C$96.9 billion, the second straight decrease, leading the broader drop across goods-producing industries. Output among service producers rose 0.2 percent.

The economy remains hobbled by weak exports and business investment, which Bank of Canada Governor Stephen Poloz says are critical to building the recovery. The central bank extended the longest interest-rate pause since the 1950s this month and said it will take two years to restore full output in the world’s 11th-largest economy.

via Bloomberg

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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.