Canada’s economy grew faster than expected in the fourth quarter, as consumers boosted spending and businesses built up stockpiles of unsold goods.
Gross domestic product rose at a 2.4 percent annualized pace from October to December, Statistics Canada said Tuesday in Ottawa. The agency also raised third-quarter growth to 3.2 percent, from an initially reported 2.8 percent. Economists surveyed by Bloomberg News forecast a 2.0 percent fourth-quarter gain, according to the median forecast.
The growth is in line with the 2.5 percent estimated by Bank of Canada Governor Stephen Poloz, who tomorrow will announce whether to follow his surprise Jan. 21 interest-rate cut with another reduction. Poloz said at the time the move was “insurance” against the risks to business and consumer spending from a plunge in crude oil prices, adding last week he has time to assess how the economy responds.
“It sets him up to stay on hold” Wednesday, Robert Kavcic, a Bank of Montreal senior economist, said by telephone from Toronto. “We just haven’t had the full impact of lower oil prices filter through the economy yet,” he said, and the central bank is “going to stand aside and see how the first quarter plays out.”
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