Canada: Strong growth expected in the second half of 2021 – NFB
|The Canadian economy rose at a 5.6% rate during the first quarter according to data released on Tuesday, slightly below expectations. According to National Bank of Canada analysts, the report does not change their view for strong growth in the second half of 2021.
Key Quotes:
“While real GDP growth in Q1 was below consensus expectations, the performance was much stronger than what was expected a few months ago. As a reminder, closures of non-essential stores in both Ontario and Quebec in the first months of the year were not auspicious for economic growth. Despite this, Canada’s performance in Q1 puts its economy in an enviable position on a relative basis. The country registered the second-best performance among G-7 countries during the quarter, bringing the Canadian economy within 1.7% of its pre-pandemic output (Q4 2019), also the second-strongest print.”
“This morning's release does not change our view for strong growth in the second half of 2021. After a temporary pause in the recovery due to public‑health measures in Q2, impressive growth can be expected as services continue to reopen. True, residential activity could come back to Earth but consumption in services (30% of GDP), which remained depressed so far, could rebound fast amidst reopenings in H2 2021. Consumption is thus likely to firm up, all the more so that households have accumulated astronomical excess savings over the last five quarters (9.5% of GDP).”
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.