(May 31 – 16:50 ET) – The Canadian economy surpassed the one trillion dollar mark for the first time during the first quarter of 2000 and Royal Bank chief economist John McCallum says this is good news on a number of fronts.
“The vital signs for the Canadian economy show strength and resilience,” said McCallum.
Today’s first quarter report continued the theme of strong growth and low inflation outside of energy prices. Real GDP growth came in at 4.9% compared to the 5.1% advance in the fourth quarter of 1999.
The current account surplus reached $4.8 billion according to StatsCan, and this could also have some positive implications.
The strong numbers from the first quarter of this year does little to alter Royal Bank’s forecast that the Bank of Canada has finished tightening. “We’re still looking at U.S. economy that shows signs of slowing down on the domestic front and this is likely to continue with the recent run-up in interest rates. When this is added in with Canada’s low inflation numbers you have a situation where the Bank of Canada can be patient on the rates front,” said McCallum.
-IE Staff