The Canadian economy\u2019s performance during the second quarter of the year came against most market expectations, showing a contraction amid a drop in home sales and exporting activity.<\/p>\n\n\n\n
A decline in the number of coronavirus cases and lifting the lockdown and preventive measures was not enough for a strong rebound in economic activity.<\/p>\n\n\n\n
Canada’s gross domestic product (GDP) contracted by 1.1% during the second quarter of 2021 to CAD 2.071 trillion, according to data by Statistics Canada released earlier on Tuesday.<\/p>\n\n\n\n
The reading came against market expectations of a 2.5% growth.<\/p>\n\n\n\n
The second-quarter contraction followed a 5.5% annualized gain during the previous three-month period.<\/p>\n\n\n\n
Meanwhile, the monthly GDP reading for June showed an expansion of 0.7%.<\/p>\n\n\n\n
The Bank of Canada (BoC) in April raised its expectations for economic growth in 2021 to 6.5%, up from a previous estimate of 4%, expecting growth to moderate starting 2022.<\/p>\n\n\n\n
The Canadian central bank expects to keep the current level of interest rates until the second half of 2022, compared with a previous estimate of 2023, as this is the time in which the bank expects inflation to return on a sustained basis to the 2% target.<\/p>\n\n\n\n
However, this could impact the timing of the<\/p>\n\n\n\n
Economists said the GDP miss could impact the beginning time of the tightening, despite expectations for rising inflation, with the August data set to provide a clearer picture.<\/p>\n\n\n\n
Canada is economy among the G7 to decline in the second quarter.<\/p>\n\n\n\n
The economic decline could play a role in the upcoming national elections after Prime Minister Justin Trudeau called for a snap election.<\/p>\n\n\n\n
Conservatives criticized the Liberal Prime Minister after the release of the GDP reading.<\/p>\n\n\n\n
Elections are set to be held in less than a month, with the Liberal and Conservative parties head to head in the polls with 33% of the vote expected for each party.<\/p>\n\n\n\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
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