Canada July GDP rises 3%, August seen up 1%

Canada July GDP rises 3%, August seen up 1%

September 30, 2020

OTTAWA (Reuters) – The Canadian economy continued to expand in July and August, clawing back from a steep drop due to the coronavirus pandemic, though the pace of growth slowed through the summer, Statistics Canada data and estimates showed on Wednesday.

Real GDP rose 3.0% in July, in line with analysts’ expectations, but below June gains of 6.5%, as all 20 industrial sectors posted increases.

August GPD, meanwhile, is expected to increase by 1.0%, Statistics Canada said in a preliminary flash estimate.

The economy still remains below pre-pandemic levels.

The Canadian dollar <CAD=> was trading 0.2% higher at 1.3366 to the greenback, or 74.82 U.S. cents, after the data.

“While there may be some disappointment with the August growth estimate of 1%, decelerating momentum should be fully expected,” said Benjamin Reitzes, Canadian rates and macro strategist with BMO Capital Markets, in a note.

July’s GDP gains included big increases for the accommodation and food service sectors, which benefited from summer travel, patio service and restaurant reopenings.

All 20 goods-producing sectors posted increases in July, leading to an overall 3.2% monthly increase in those sectors, while the service-producing sector grew by 3.0%.

(Reporting by Julie Gordon and Steve Scherer; Editing by Andrew Cawthorne)