Toronto/CMEDIA: The Canadian economical growth at an annual rate of 6.7 percent in the fourth quarter was faster than the Bank of Canada anticipated which ensured an interest-rate hike when results of the latest policy deliberations would be announced by the policy-makers tomorrow.
A surge in economic growth in the fourth quarter is attributed to the business investment, fees related to home sales, and stockpiling by companies, Statistics Canada said.
A separate Statistics Canada report revealed that the gross domestic product (GDP), based on output by industries, was little changed in December, suggesting the economy held up in the face of the Omicron wave of COVID-19 infections.
Preliminary information said Statistics Canada suggests GDP increased 0.2 percent in January.
The growth of GDP was predicted in January to grow at an annual rate of 5.8 percent in the fourth quarter by the Bank of Canada.
This estimate was strong enough for the central bank to conclude it was time to end the benchmark interest rate near zero until at least the spring of 2022.
Canada’s economy ended with considerable momentum in 2021 at an annual rate of 5.5 percent in the third quarter, which was also much faster than Canada’s economy typically expands.
With a drop in the household disposable income by 1.3 percent in the four quarters from the previous quarter, even as employee compensation increased 1.9 percent, the consumption impulse was expected to grow dim, marking a return to pre-pandemic levels of less than 20 percent, Statistics Canada said.
The savings rate dropped from nine percent to 6.4 percent, still high by recent historical standards, but down from the previous five quarters, when the savings rate was above 10 percent.