Canada’s Gross Domestic Product (GDP) data for the October-December period is anticipated to be released by Statistics Canada on Thursday, February 29 at 13:30 GMT. Ahead of the release, economists and researchers from five major banks have provided their forecasts regarding the expected growth data.
The Canadian economy is predicted to have expanded by 0.8% during the mentioned period, rebounding from the 1.1% contraction recorded in the third quarter of 2023.
Here are the forecasts from each bank:
TDS: They anticipate Canada to avoid a hard landing, with real GDP growth of 0.8%, supported by household consumption and residential investment.
RBC Economics: Expectations are for Q4 GDP growth to remain positive with a small annualized increase of 0.5%, preventing the economy from facing two consecutive quarters of contraction. However, when adjusted for rapid population growth, it marks the sixth consecutive quarterly decline on a per-capita basis.
NBF: Reports suggest healthy growth in household consumption, partially offset by a contraction in business investment. Residential investment may have declined, while inventory depletion may have been offset by an improvement in net exports. Overall, GDP is expected to have risen by 0.7% in annualized terms.
CIBC: They predict 0.8% annualized growth, mainly driven by an expansion in the supply side of the economy, which does not pose an inflation threat. Mixed early indicators for activity in January will provide more insight into output levels.
Citi: Anticipates a 1.3% quarter-on-quarter increase in Q4 GDP, stronger than the Bank of Canada’s forecast of flat growth. Despite potential volatility in quarterly GDP data, even softer-than-expected output growth is unlikely to significantly increase the chances of rate cuts.
Overall, modestly stronger growth in Q4 and the first half of the year should keep Bank of Canada officials slightly more inclined towards a hawkish stance.