Statistics Canada’s newest GDP knowledge confirms the Canadian economic system continued to develop within the ultimate quarter of 2024, increasing by 0.6%. The expansion was pushed largely by larger family spending, elevated exports, and stronger enterprise funding.
On an annualized foundation, This autumn GDP rose 2.6%, exceeding economists’ expectations by almost a full share level. On a per capita foundation, Canada’s actual GDP—adjusted to exclude progress from inhabitants will increase—rose 0.2% in This autumn, following a 0.1% decline within the earlier quarter.
StatCan’s GDP report for December 2024 confirmed the economic system grew by 0.2%, partially reversing November’s decline, although the rise got here in barely beneath economists’ expectations.
Within the background, StatCan revised its GDP knowledge for each Q2 and Q3 2024 considerably larger. Q2 progress was adjusted to 2.8% from 2.2%, whereas Q3 was revised to 2.2% from 1.0%.
“The Canadian economic system had good momentum by way of the again half of 2024, as aggressive Financial institution of Canada charge cuts helped juice exercise,” famous BMO’s Benjamin Reitzes. “Sadly, most of this was largely earlier than tariff threats actually ramped up.”
Markets break up on March charge reduce as tariff considerations take centre stage
Whereas sturdy GDP progress to finish 2024 would sometimes help a pause in charge cuts, some economists argue that final 12 months’s knowledge is unlikely to sway the Financial institution of Canada’s choice.
“Right now’s GDP launch isn’t going to sway the BoC. Sure, the report was sturdy, however Governor Macklem is extra involved in regards to the dangers on the horizon reasonably than what occurred final 12 months,” says TD‘s James Orlando. “The financial institution’s personal analysis exhibits large draw back dangers to the economic system ought to tariffs come to go.”
Orlando added that market odds for the subsequent BoC charge choice is mainly a coin toss.
“Nobody would complain if the BoC took out extra insurance coverage in opposition to the draw back dangers with one other 25 bp reduce, whereas a maintain is also justified ought to the financial institution desire to take a wait-and-see method,” he mentioned.
Nonetheless, RBC’s Nathan Janzen and Carrie Freestone argue that the power of This autumn 2024 progress alone is sufficient to justify a charge pause, even with out factoring in potential tariffs from the U.S.
“We count on the indicators of life within the family sector and upside inflation surprises in latest months will likely be sufficient for the BoC to face pat on rates of interest in March for the primary time since June 2024,” they wrote. “The potential for important tariff hikes stay a draw back danger to financial progress and the rate of interest outlook, however absent a commerce shock, financial knowledge is suggesting Canada’s economic system could also be faring higher than initially feared.”
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Financial institution of Canada Benjamin Reitzes Carrie Freestone financial knowledge financial information gdp gdp progress james orlando Nathan Janzen statcan GDP statistics canada statistics Canada GDP
Final modified: February 28, 2025