GDP Grows a Minuscule 0.8%
CBJ — The Canadian economy slowed markedly in the fourth quarter with the GDP growing just 0.8% in the last three months of 2015, as business investment dwindled and exports shrank. Even so, the loonie is rallying as growth exceeded Bay Street’s low expectations.
However, there are clear signs of persistent weakness in Canada’s economy as a result of the collapse in crude price. Notably, business investment on non-residential structures, machinery and equipment plunged an annualized 12.4% in the final three months of 2015.
The Canadian economy fell into a technical recession at the start of 2015 when it contracted over the first two quarters by a revised 0.9% and again by a revised 0.4%. Real GDP increased by a revised 2.4% in the third quarter.
The reading was released as the federal government prepares a spring budget expected to contain billions worth of commitments — such as infrastructure spending — that it insists will help revive economic growth and create jobs. The budget date is March 22.
Last week, the Liberal government acknowledged next year’s deficit could surpass $20 billion — and some observers believe it could reach as high as $30 billion.