Canadian economy grew 0.2 per cent in November

The Canadian economy grew 0.2 per cent in November, marking the first month of expansion in six months, Statistics Canada reported January 31.

A preliminary estimate suggests real gross domestic product increased 0.3 per cent in the fourth quarter after posting a decline in the third quarter.

That would bring economic growth in 2023 to 1.5 per cent, StatCan said.

The Canadian economy has slowed over the last year as higher borrowing costs weigh on consumer spending and business investment. But it has so far avoided a recession.

The federal agency said growth in November was driven by gains in goods-producing industries, including manufacturing and wholesale trade.

Meanwhile, education services sector shrank in the month as strikes in Quebec began.

The Bank of Canada as well as private sector economists expect economic growth to remain weak in the first half of 2024 before rebounding in the second half of the year.

The central bank is widely expected to start cutting interest rates as early as this spring, which should help the economy bounce back.

At the last interest rate decision, governor Tiff Macklem indicated that conversations at the governing council have shifted toward the timing of rate cuts.

The central bank’s key interest rate currently sits at five per cent, the highest it’s been since 2001.

This report by The Canadian Press was first published Jan. 31, 2024.

This is a corrected story. A previous version compared a quarter-over-quarter growth rate with an annualized growth rate.