TD Securities’ Global Strategy Team forecasts Canadian real GDP to contract by 0.4% annualized in Q4, driven by weaker domestic demand, falling household goods consumption and softer housing activity, partly offset by government spending and net exports. However, the bank expects a 0.2% gain in December GDP and continued 0.1–0.2% growth in January, setting a firmer base for Q1.
Q4 softness but Q1 outlook improves
“We look for real GDP to contract by 0.4% q/q (saar) in Q4 National Accounts, led by further weakness in domestic demand.”
“Household goods consumption should see its second consecutive decline after the 2.0% contraction in Q3, alongside a modest increase for services, while softer housing activity contributes to another drag from residential investment.”
“Government spending should provide the main source of strength in Q4, along with a positive contribution from net exports.”
“Growth conditions look considerably brighter for December’s industry-level GDP where we look for a 0.2% advance underpinned by strength in services.”
“We also look for new flash estimates to show continued strength (0.1%-0.2%) in January, which would help put Q1 GDP on a stronger footing.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/canada-q4-gdp-contraction-brighter-q1-td-securities-202602271128
