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Q4/2019 GDP growth slowed to 0.3% as ‘transitory’ factors explain some but not all of the slowing. Early 2020 also likely to be soft, and BoC likely to cut rates, in the opinion of Nathan Janzen from RBC Economics.

Key quotes

“Headline GDP increased just 0.3% in Q4 2019. That was broadly in line with market expectations, and matched the Bank of Canada’s last forecast.” 

“Consumer spending was surprisingly solid in Q4 given earlier lackluster retail sales data, but business investment was softer than assumed and net trade was a larger drag on growth than expected.” 

“There were some signs of stabilization in today’s data but growing fears about the potential impact of the new coronavirus outbreak abroad, and another bout of disruptions to rail transportation from anti-pipeline protests mean growth is likely to remain weak, at least for the first half of 2020.” 

“We continue to look for the Bank of Canada to cut rates at least once in the months ahead.”