- Krishen Rangasamy, senior economist at National Bank of Canada
Canada's economy expanded for a third month in August, rebounding from an oil shock that pulled the nation toward recession in the first half of this year. Canada's gross domestic product rose 0.1% in the reported month, following a 0.3% in July, according to Statistics Canada. Measured on an annual basis, the Canadian economy grew 0.9% in August, compared with a downwardly revised 0.7% growth a month earlier. The declines earlier in the year were primarily driven by the energy sector, which was undermined badly by the oil price plunge, first in exploration and then in extraction. The volume of oil and gas output increased 0.3% in August, following gains of 2.6% and 3.9% in June and July respectively. It sat 6.5% higher than a year earlier but was still below February's peak.
Economists predict that if September GDP numbers do not disappoint, the economy will be on track to reach the Bank of Canada's projected 2.5% growth in the third quarter. At its recent meeting, the central bank kept interest rates on hold at 0.5%, referring to a persistent slack in the economy, and revised its third quarter projection from 1.5% to 2.5%.
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