Canadian GDP Growth - Q3 - November 30, 2011

Canadian economic growth rebounded strongly in the third quarter of 2011 following a slight contraction in Q2.  Real GDP data released this morning showed that the economy grew a robust 3.5 per cent last quarter, propelled higher by surging exports. However, domestic demand moderated as consumers and businesses reigned in spending. 

Our forecast is for economic growth to slow in the fourth quarter and through much of 2012, likely to an average rate of between 1.5 and 2.5 per cent. Slow growth in Canada and uncertainty in the global economy will keep inflation steady and allow the Bank of Canada to hold off on rate hikes through much of next year, with the potential for moderate tightening near the end of 2012.