The Canadian economy registered no growth in August as a slowdown across the country appears to be worsening.
Preliminary estimates suggests that Canada’s economy grew at a tepid 0.3% in September and an annualized rate of only 1% in this year’s third quarter.
Statistics Canada’s latest report on gross domestic product (GDP) showed notable declines in goods-producing industries and the manufacturing sector.
Stagnant economic growth was widespread in August and included utilities, wholesale trade, and transportation.
The report singled out shutdowns at Canada’s two largest railways as contributing to the economic slowdown in August.
Statistics Canada’s estimate for third quarter GDP is weaker than the Bank of Canada’s own forecast of 1.5% annualized growth.
The slump in the economy gives the central bank leeway to further reduce interest rates in coming months, which would be positive for consumers and businesses.
In October, the Bank of Canada cut interest rates by 50-basis points, lowering its benchmark overnight interest rate to 3.75%.
Since the start of summer, Canada’s central bank has lowered interest rates a total of 1.25%. Its final rate decision of the year is scheduled for Dec. 11.
Bank of Canada officials have said that they expect Canada’s economy to rebound in 2025 as interest rate cuts spur consumer and business spending.
