Canada’s indefatigable households and a sharp drop in imports kept the country’s economy growing at a 2.6 percent annualized pace in the final quarter of 2016, helping offset what looks to be a deepening slump in business investment.
Statistics Canada also raised its third-quarter growth estimate to 3.8 percent, from 3.5 percent, showing the nation’s economy had its best half-year performance since the final six months of 2013, or before the collapse of oil prices.
The confirmation that Canada is emerging from the commodity slump should come as a relief to policy makers who struggled to cope with a near-stagnant economy, as the nation dealt with the impact of an oil price shock and faltering export sector.
It will also test Bank of Canada Governor Stephen Poloz’s resolve in asserting that the nation’s economy is lagging considerably behind the U.S. in terms of economic slack. The U.S. economy expanded at a 1.9 percent pace in the fourth quarter.
For the month of December, GDP was up 0.3 percent, Statistics Canada reported.
Economists had estimated a 2 percent annualized gain in the fourth quarter and a 0.3 percent increase in December, according to a Bloomberg survey.