- Real GDP growth in Canada was stronger than expected in the fourth quarter on an annualized quarterly basis, but weaker than expected in December.
- The loonie did not react to the mixed data as the focus remains on geopolitics.
Canada’s real GDP it expanded at a 6.7% annualized pace in the fourth quarter, beating expectations for a 6.5% reading, the latest Statistics Canada report showed on Tuesday. The quarter-on-quarter growth rate in the fourth quarter registered 1.6%, compared to 1.3% in the third quarter. The year-on-year pace of GDP growth in the fourth quarter (i.e. GDP Q4 2020 vs. GDP Q4 2021) was 3.26%, down from 3.84% in the third quarter.
The stronger annualized growth pace in the quarter hid a weaker-than-expected MoM growth pace in December of 0.0%, modestly disappointing expectations of 0.1%. The economy was hit in December and January by the rapid spread of the Omicron Covid-19 variant. Therefore, growth was never expected to be so strong.
market reaction
The loonie didn’t seem to react to the latest mixed GDP figures, with the market largely focused on geopolitics.
Source: Fx Street
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