Canada’s Economy Stagnates for Second Consecutive Month, GDP Decline Expected in September

Canada’s economy remained stagnant for the second consecutive month, with no growth recorded in August, according to the latest data from Statistics Canada.

Economists had expected the economy to grow by 0.2 per cent in August, following zero growth in July. However, real gross domestic product (GDP) remained unchanged. The slowdown was mainly driven by a 1.4 per cent decline in wholesale trade and weaker activity in the public sector.

Some sectors, however, showed positive growth. Retail trade increased by 1.2 per cent, while the manufacturing sector also recorded growth.

Meanwhile, Statistics Canada’s preliminary estimates suggest that Canada’s GDP could decline by 0.1 per cent in September, potentially due to losses in the manufacturing and mining sectors.

The weak economic figures come just two days after the Bank of Canada raised its benchmark interest rate to 2.50 per cent. Money markets expect the central bank could announce another 25-basis-point increase in January, potentially pushing the key interest rate to 2.75 per cent.