-Silvana Dimino, JPMorgan's Canada economist
The Canadian economy grew more than expected in the December quarter, albeit at a slower pace than in the preceding three-month period. Canada's economic outlook rose an annualized 2.4% in the fourth quarter, after an upwardly revised 3.2% growth in the September quarter, Statistics Canada said. The data overshot economists expectations for a 2% expansion, alleviating some pressure ahead of the Bank of Canada's interest rate decision. The growth was supported by a robust consumer spending, extraction of natural resources as well as business inventories. However, exports of goods and services declined by an annualized rate of 1.6% in the fourth quarter after jumping 8.9% in the preceding quarter, while imports rose by an annualized rate of 1.7% after an increase of 4.2% in the previous three-month period. Measured on a monthly basis, Canada's GDP rose 0.3% in December amid gains in manufacturing, after a November contraction of 0.2%.
Another report showed that Canada's industrial product and raw materials prices continued to decline in January due to falling oil prices. Industrial Product Price Index dropped for the fifth straight month falling 0.4% in January, after an upwardly revised 1.5% decline a month earlier, Statistics Canada reported. Energy and petroleum products, which plummeted 11.2%, appeared to be the main contributor to the weak data.
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