The Canadian Press

Analysts are looking for another key growth indicator Wednesday when Statistics Canada reports how the economy performed at the start of the year.

The consensus is that the country’s gross domestic product grew by 0.5% in January — or about 6% annualized — which should put Canada on track for a quarter of rapid growth.

Economists say they have been surprised just how strongly Canada has recovered from the 18-month economic deep freeze that descended on the country in October 2008 and that began to thaw slowly in the middle of last year.

Some are even starting to ask what would have been an absurd question just a few months ago: Is the Canadian economy in danger of overheating?

Growth in the last three months of 2009 beat the Bank of Canada’s expectations by almost two percentage points, rising at an annualized rate of 5%, and many now see a similar bounce in the first quarter of 2010.

Although the quarter ends Wednesday, Statistics Canada won’t issue its gross domestic product for the whole period until the end of May with the GDP report for March.

Although business and economic news has been generally positive so far this year, trouble spots remain.

Consumers may be getting overextended and some interest rates for mortgages have started to rise.

But in the aggregate, the domestic economy is roaring, economists say.

House prices, sales and starts have all rebounded, consumer spending remains strong, stock markets have partly come back from last year’s low, and the job picture appears to be improving with each new report.

Even the depressed auto sector is seeing the light at the end of the tunnel.

On Tuesday, Honda Canada said it will add a second shift and 400 jobs at its No. 2 assembly plant in central Ontario early next year, which follows the announcement by General Motors that it will recall more than 700 laid-off employees at Oshawa and Ingersoll, Ont.

These are all signs of a classic V-shaped recovery, if the current trend continues, something no one thought possible a year ago when Canada and the world were staring at an abyss.

Queens University economics professor Thorsten Koeppl says its understandable that governments and central bankers responded with massive stimulus measures and floor-low interest rates a year ago.

But now he says there is a risk the stimulus is kicking in too late and is actually pushing down too hard on the accelerator, possibly overheating the economy.

The consensus is that the upward momentum can’t last, but some analysts say a stronger bounce with revived hiring in Canada can no longer be dismissed as irrational exuberance.

IE