Canada's economy slowed in third quarter

Canada's economy put on the brakes in the third quarter sending growth falling to 1.3 per cent, or almost one-third of the previous three months' GDP, the government statistical agency said Friday.

Statistics Canada blamed a drop in exports for the slowdown, noting that it was moderated by an uptick in consumer spending and business investment.

The agency also revised downward its second quarter gross domestic product (GDP) figure to 3.5 per cent from its initial estimate in August of 3.7 per cent. This expansion was the fastest among Group of Seven industrialised countries.

Canada's GDP in the three months ending September 30 was in line with analysts' forecasts.

With projections of a further slowing in activity toward the end of the year, most economists believe the Bank of Canada will leave its key lending rate unchanged at 1.75 per cent when it is announced next week.

"Canada's third quarter was another so-so result," commented CIBC analyst Avery Shenfeld, "with this quarter's growth rate also in line with the average pace we've seen in the past year or more."
Interest rates, he said, were likely "low enough to offset the drag from weak external markets."