Canadian economy grew slightly in July, StatsCan says

By Nojoud Al Mallees, The Canadian Press | September 29, 2022 | Last updated on September 29, 2022
2 min read
Businessman climbing towards growth in statistics

The Canadian economy grew slightly in July with the latest reading on real gross domestic product coming in higher than expected.

Statistics Canada said Thursday that the economy grew by 0.1% in July, outperforming its preliminary estimate that pointed to a contraction of 0.1%.

The federal agency said growth in the goods-producing industries was partially offset by a decline in the services-producing industries.

The retail sector along with food and accommodation services shrunk. The contraction in these industries may mean high inflation and interest rates are affecting consumers more broadly, said CIBC senior economist Andrew Grantham in a note.

As the Bank of Canada continues to raise interest rates to tame inflation, an economic slowdown is widely anticipated.

Some banks are forecasting the economy grew at an annualized rate of around 1% in the third quarter.

For comparison, the economy grew at an annual rate of 3.3% in the second quarter.

The Bank of Canada is expected to raise its key interest rate again in October as inflation remains well above its 2% target.

“Policy-makers are likely to press ahead with another rate hike next month,” Grantham said. “However, signs of consumer spending weakening even in some service industries should see the bank then take a pause.”

The annual inflation rate in August was 7.0%.

Statistics Canada notes the mining, quarrying, oil and gas sector grew by 1.9% in July, following slight declines in the two previous months.

The agriculture, forestry, fishing and hunting sector also grew as crop production increased.

Meanwhile, manufacturing and wholesale trade posted declines.

The latest reading follows similar growth in June, when the economy expanded by 0.1%.

A preliminary estimate for August indicates real GDP for that month was essentially unchanged.

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Nojoud Al Mallees, The Canadian Press

Nojoud Al Mallees is a reporter with The Canadian Press, a national news agency headquartered in Toronto and founded in 1917.