Canada’s Economy Rebounds in April, Outpaces Expectations and Bank Forecasts: GDP Growth Analysis

Canada’s economy is experiencing growth, with its gross domestic product (GDP) increasing by 0.3% in April, in line with market expectations. This was driven by sectors such as wholesale trade and manufacturing, which rebounded from zero growth in March. This growth was the fastest since January, with the mining, quarrying, oil and gas extraction, and manufacturing sectors leading the way.

According to preliminary estimates for May, the GDP is likely to have increased by 0.1%. Sectors such as manufacturing, real estate, rental and leasing, and finance and insurance saw growth, while retail trade and wholesale trade experienced decreases. If these estimates hold true, this puts Canada on track to exceed the Bank of Canada’s second quarter annualized growth forecast of 1.5%.

In April, 15 out of 20 sectors saw growth. Retail trade contributed to this growth after two consecutive monthly declines. Construction, real estate, rental and leasing were among the sectors that weighed on growth in April. Both goods-producing and services-producing industries grew by 0.3% in April.

The Bank of Canada recently cut its key policy rate for the first time in over four years and hinted at the possibility of more cuts to come if inflation did not reach the target rate of 2%. However, recent inflation data showed an unexpected rise in consumer prices in May