Statistics Canada has released data that shows Canada’s economy has grown at an annualized rate of 6.1% in the first quarter of 2010. National Gross Domestic Product (GDP) has increased by 1.5% in the first quarter of 2010, when it is compared to the last quarter of 2009.
Real GDP has increased 0.6% in March from February, which marks the seventh consecutive monthly advance. Comparing with just south of the border, we have the U.S. economy grow by an annualized rate of 3.0% in the first quarter.
As Canada’s economy continues to show great growth, we have the Canadian dollar move higher. The loonie was up 0.77 of a cent to 95.83 cents US, as the economy increased 0.3% higher than what economists had expected.
The GDP recent increase was also better than what had been anticipated.
The recent increase in the loonie has come just a day before the Bank of Canada makes its announcement on interest rates.
It is not surprising to see Canada’s economy doing much better than we had all anticipated. There have been several reports, which has made note of the Canadian economies performance. The Canadian economy is poised to shine in the coming years as well according to the most recent report from CIBC World Markets. (The article can be found here).
BMO Capital Markets, deputy chief economist Douglas Porter noted that if the bank does what is widely expected, it would mark the first tightening move that has been made by the G-8 central bank since the 2008 financial crisis. Since April 2009, the Bank of Canada has kept its key rate at 0.25%, which has helped stimulate the Canadian economy.
Before this announcement, investors have been looking to the latest update on Canadian economic growth; as it stands Statistics Canada is expected to report that the first quarter growth came in at an annualized rate of 6%.
The recent quarterly reports from the banks in Canada showed that the results were much better than analysts had anticipated. This goes to show how well the Canadian economy has been doing the past year.
I for one cannot wait to see the effects of the Bank of Canada increasing interest rates; by tomorrow we will know if there will be any increases, until then we will have to wait.