"Over time, as the normalization of these conditions unfolds, a gradual normalization of policy interest rates can also be expected,"
- BoC Governor Stephen Poloz
Canada wholesale sales, which is a leading indicator of consumer spending, soared unexpectedly in May, expanding at the fastest pace in more than two years, supported by sales of fertilizer and food, data from Statistics Canada showed. Sales jumped 2.3% to 50.3 billion, compared with a 0.3% gain in the preceding month, and outpacing analysts' expectations, who predicted no change at all. In addition to that, the volume of wholesale sales swelled 2.4% over the same period. The main factor that boosted sales was agricultural supplies industry, which posted a 19.6% increase in May, recording its sixth consecutive gain. Moreover, higher sales reported the food industry, where sales surged 4.2%, while sales in motor vehicle and building materials advanced 1.4% and 1.3%, respectively.
Earlier this week, the newly-appointed Bank of Canada Governor Stephen Poloz held the benchmark interest unchanged at 1% and signalled that consumers and homebuyers should not worry about borrowing costs, which are likely to stay low for the foreseeable future. The nation's central bank expects economic growth to be choppy in the nearest future, due to several factors, including flooding in Alberta and construction strike in Quebec. According to latest estimates, Canada economic output should register a sluggish 1.8% growth this year, and accelerate to 2.7% in the next year.
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