The Canadian financial system principally began 2022 on sturdy footing, regardless of the affect of the Omicron coronavirus variant and protests that shut down key border crossings, as fourth quarter development got here in above expectations, official knowledge confirmed on Tuesday.
Canada’s financial system grew 6.7 per cent within the fourth quarter on an annualized foundation, beating analyst expectations of 6.5 per cent, whereas January GDP more than likely rose 0.2 per cent after stagnating in December, Statistics Canada knowledge confirmed.
With January’s achieve, which is a preliminary estimate, financial exercise is now 0.6 per cent above pre-pandemic ranges, the company stated.
“Whereas the clouds darkened a bit earlier than the tip of the yr … GDP posted a shocking 0.2 per cent advance in January regardless of the Omicron wave and the entire related job losses,” stated Royce Mendes, head of macro methods at Desjardins Group.
“The financial system possible constructed on that momentum in February, as the newest COVID wave turned a nook, which allowed for extra reopenings throughout the nation.”
The sturdy fourth quarter print got here in above the Financial institution of Canada’s personal January forecast of a fourth quarter achieve of 5.8 per cent. The central financial institution is broadly anticipated to boost its key rate of interest to 0.50 per cent when its meets on Wednesday.
“I do not suppose the year-end numbers change the image a lot for the financial institution aside from to drive dwelling the purpose that the financial system was nonetheless managing to grind forward even within the face of Omicron,” stated Doug Porter, chief economist at BMO Capital Markets.
The Canadian greenback was buying and selling 0.1 per cent larger at 78.96 U.S. cents.