Briefing

Economy effectively flat in fourth quarter of 2019, Statistics Canada data shows

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Canada’s GDP expanded at an annualized rate of 0.3 per cent, in line with economists’ expectations, according to data gathered by Refinitiv. StatCan said the economy grew by 1.6 per cent across the whole of 2019, down from two per cent the previous year. (The Canadian Press)

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Talking point: The fourth-quarter figures are the worst since the second quarter of 2016, when the economy last contracted. Consumers kept GDP growth going in the fourth quarter, with household spending up two per cent annualized, particularly because of expenses like rent, food services and flights. But exports and business investment dropped significantly by 5.1 per cent and three per cent annualized, respectively. Rail and auto workers’ strikes in Canada and the U.S. contributed to that decline. The first quarter of 2020 seems unlikely to provide better economic news; the parliamentary budget officer said earlier this month that disruptions related to COVID-19 could cut real GDP growth by 0.3 per cent annualized.