Canada’s economy slows more than expected

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The Canadian economy grew at a slower-than-expected rate in the first quarter, raising expectations of a Bank of Canada interest rate cut.

The country’s gross domestic product, which measures the value of goods and services for a specific timeframe, rose by 0.4 per cent in the first three months of 2024, according to Statistics Canada.

“The Bank of Canada remains on track to cut interest rates in June given the cooling seen in inflation and the fading of momentum in GDP over the quarter,” CIBC Capital Markets economist Katherine Judge said in a note after the data came out.

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The agency also revised its GDP figure for the fourth quarter of 2023 to flat from 0.2 per cent.

Household spending rose by 0.7 per cent in the first quarter, primarily due to a 1.1 per cent increase in spending on telecommunications services, rent and air transport, Statistics Canada said.

Lower spending by non-residents in Canada also contributed to the increase in overall household expenditures. On a per-capita basis, household consumption expenditures edged up 0.1 per cent in the first quarter, following three quarters of declines.

• Email: nkarim@postmedia.com

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