OTTAWA — Canadian economic growth came in slower than expected for the first quarter, strengthening the case for a possible interest rate cut by the Bank of Canada next week.
The report is the last major economic data point before the Bank of Canada’s interest rate decision next week. The central bank had been expecting an annual growth rate of 2.8 per cent for the first quarter. "If it wants to keep up this effort of transparency and forward guidance, we expect the BoC will hold rates steady next week and use the meeting to tee-up a rate cut in July," Orlando wrote in a report.Bank of Canada governor Tiff Macklem has said a rate cut is within the realm of possibilities, but that the decision will be guided by the economic data.
Statistics Canada also said household final consumption spending on a per-capita basis edged up 0.1 per cent in the first quarter, after falling for three consecutive quarters.