【Canada's Q1 GDP Annualized Shrank by 0.1%, Declining for Two Consecutive Quarters, Trade and Tariffs Weigh on Growth】
⑴ According to data released by Statistics Canada on Friday, the first-quarter gross domestic product (GDP) declined at an annualized rate of 0.1%, marking the second consecutive quarter of annualized contraction following a 1% annualized drop in the fourth quarter of last year, with some market perspectives referring to this as a technical recession.
⑵ On a quarter-to-quarter basis, Q1 GDP remained flat compared to the previous quarter, narrowly avoiding the technical recession definition at the quarterly level; however, institutions and analysts had previously expected an annualized growth of 1.5%.
⑶ The agency stated that Canada’s economy has largely weathered trade uncertainties and tariff impacts over more than a year, but the ripple effects of tariffs have already weakened investment, hiring, and spending while pushing up prices. Additional uncertainty has been introduced by the upcoming review of the North American Free Trade Agreement (NAFTA) and oil price shocks triggered by the war in the Middle East.
⑷ The first-quarter GDP was negatively affected by high levels of imports, yet this was largely offset by substantial inventory accumulation. Household spending—particularly in financial services and food—rose, but was counterbalanced by declines in business and government investment. Business capital investment continued its fifth consecutive quarterly decline.
⑸ GDP declined by 0.1% month-over-month in March, worse than the expected flat performance. Preliminary estimates from the agency suggest a potential 0.4% increase in April, signaling a strong start to the second quarter. The Bank of Canada previously projected this year’s growth at 1.2%, lower than last year’s 1.7%, with updated forecasts to be released in July.
Original source: toutiao.com/article/1866537880443916/
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