Canada: Q4 GDP contraction, brighter Q1 – TD Securities
|TD Securities’ Global Strategy Team forecasts Canadian real GDP to contract by 0.4% annualized in Q4, driven by weaker domestic demand, falling household goods consumption and softer housing activity, partly offset by government spending and net exports. However, the bank expects a 0.2% gain in December GDP and continued 0.1–0.2% growth in January, setting a firmer base for Q1.
Q4 softness but Q1 outlook improves
"We look for real GDP to contract by 0.4% q/q (saar) in Q4 National Accounts, led by further weakness in domestic demand."
"Household goods consumption should see its second consecutive decline after the 2.0% contraction in Q3, alongside a modest increase for services, while softer housing activity contributes to another drag from residential investment."
"Government spending should provide the main source of strength in Q4, along with a positive contribution from net exports."
"Growth conditions look considerably brighter for December's industry-level GDP where we look for a 0.2% advance underpinned by strength in services."
"We also look for new flash estimates to show continued strength (0.1%-0.2%) in January, which would help put Q1 GDP on a stronger footing."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.