Canada’s gross domestic product (GDP) rose 2.9% in the third quarter at an annualized rate, far exceeding analysts’ expectations, the Canadian Statistical Institute said Tuesday.
The fifth consecutive quarterly increase in GDP was mainly attributable to growth in exports of crude oil and bitumen (+2.1%) and a strong accumulation of inventories for the second consecutive quarter.
Inventories rose in the manufacturing, wholesale and retail sectors to “a record increase in inventories,” Statistics Canada said.
However, this increase was tempered by a drop in investment in housing for a second consecutive quarter, as well as a reduction in household spending.
“The strong growth in the third quarter does not really reflect the underlying strength of the Canadian economy,” said Royce Mendes, financial analyst at Desjardins Bank, noting that “much of the increase came from the categories of volatile and external demand”.
Initially forecast at 3.9% for 2022, Canadian GDP growth is expected to contract to 0.7% in 2024, the government estimated in its latest budget update.
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