The ongoing wave of COVID-19 infections proved no impediment to Canada’s economic recovery, with growth at the start of the year exceeding all expectations.
The latest data from Statistics Canada shows that real gross domestic product increased by 0.7% monthly in January, compared to the 0.1% reading in December. This marked the ninth straight month of economic growth, and surpassed earlier estimates of a 0.5% expansion for the beginning of 2021.
“Not only did Canada’s economy hold its ground during the worst of the second wave, but GDP growth actually accelerated in January,” said Royce Mendes, economist at the Canadian Imperial Bank of Commerce.
The results gave further credence to the central bank’s recently announced steps towards dialling down its long-running monetary stimulus.
“The economy’s stronger-than-expected performance at the start of 2021 bodes well for the recovery this year and is likely to further convince the Bank of Canada that it is time to reduce the pace of its asset purchases,” said Stephen Brown, senior Canada economist at Capital Economics.
Weaknesses in the hospitality and food services industries have been compensated by unusual strength in mining, quarrying, and oil and gas extraction, which together saw 2.7% growth in January, the Financial Post reported.
“Retail trade, construction, and real estate and rental and leasing all contributed to the growth, while manufacturing offset some of the increase,” StatsCan added.