{"id":7943,"date":"2023-09-30T13:04:31","date_gmt":"2023-09-30T13:04:31","guid":{"rendered":"https:\/\/roydadnaft.ir\/English\/?p=7943"},"modified":"2023-09-30T13:04:31","modified_gmt":"2023-09-30T13:04:31","slug":"canadas-economy-stalled-in-july-as-previous-rate-hikes-took-hold","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/7943\/","title":{"rendered":"Canada’s economy stalled in July as previous rate hikes took hold"},"content":{"rendered":"

RoydadNaft – <\/a><\/span>\u00a0Canada’s economy stalled in July and edged up slightly in August, data showed on Friday, highlighting a recent sluggish performance that prompted markets to trim bets for another interest rate hike next month.<\/p>\n

Growth ground to a halt in July as the manufacturing sector posted its biggest decline in more than two years, but it most likely ticked up 0.1% in August, Statistics Canada said.<\/p>\n

Analysts polled by Reuters had forecast a 0.1% monthly gain for July after a 0.2% contraction in June. The economy is slowing after the Bank of Canada’s decision to raise rates 10 times since early last year.<\/p>\n

“The economic data … continue to paint a picture of an economy that has stalled,” Royce Mendes, head of macro strategy of Desjardins Group said in a note. “(That) should give central bankers confidence that their medicine is slowly working.”<\/p>\n

The bank held its key overnight interest rate at 5% on Sept. 6, noting the economy had entered a period of weaker growth while warning it could hike again if inflation gets stuck well above its 2% target.<\/p>\n

After the release of the gross domestic product figures, money markets trimmed bets for a rate hike next month to a 27%chance from a 31% chance before.<\/p>\n

“Canada is really struggling to grow right now … (this) argues for (the bank) to remain on hold and lean on the tightening that has already been put in place,” said Robert Kavcic, senior economist at BMO Economics.<\/p>\n

The Canadian dollar was trading 0.4% higher at 1.3434 per U.S. dollar, or 74.44 U.S. cents, as the greenback gave back some recent gains against a basket of major currencies.<\/p>\n

The economy unexpectedly contracted in the second quarter at an annualized rate of 0.2%, far lower than the Bank of Canada’s forecast of a 1.5% annualized rise.<\/p>\n

“The third quarter as a whole is tracking growth of a little under 0.5% annualized, which is a very muted rebound following the second quarter’s surprise decline,” said Andrew Grantham, senior economist at CIBC Capital Markets.<\/p>\n

Overall in July, the service-producing sector edged up 0.1% while the goods-producing sector posted a 0.3% contraction.<\/p>\n

The manufacturing sector shrank by 1.5% over June, the biggest month-on-month drop since April 2021, largely due to firms drawing down their inventories.<\/p>\n

Some sectors hit by wildfires in June bounced back in July. Mining and quarrying, except for oil and gas, jumped by 4.2% while accommodation and food services posted a 2.3% gain.<\/p>\n

Updated on