Solid Economic Growth in May

CBJ — Stronger-than-expected growth in the Canadian economy in May points to another interest rate hike this fall but economists don’t think it will happen at the next Bank of Canada rate announcement in September.

Figures released by Statistics Canada show the Canadian economy grew by 0.5% in May thanks to strong performances by both domestic and export-oriented sectors.

The Bank of Canada has forecast GDP growth of 2.8% in the second quarter ended June 30, slightly less than analyst expectations of 3.0%.

The oil and gas sector led the way in May with a 2.5% increase as those oilsands facilities returned to production. The manufacturing sector edged up 0.1%. The utilities sector was the biggest loser, contracting by 2.4%.