World Economy

Canada Growth Declines

Canada Growth DeclinesCanada Growth Declines

Canadian economic growth unexpectedly edged down in April, hurt by a decline in activity in the mining and oil and gas extraction industry, data from Statistics Canada showed on Tuesday, boding poorly for an anticipated pick-up in growth in the second quarter.

The country’s gross domestic product fell 0.1% in April from the month before, short of analysts’ expectations for a gain of 0.1%,Reuters reported.

The decline marked a disappointing start to the quarter and was the fourth monthly decrease in a row. The economy contracted in the first quarter at its worst pace in nearly six years, stung by the drop in oil prices, but analysts and policymakers have been expecting it to regain momentum, starting with the second quarter.

Oil and gas extraction fell 3.4%, mainly due to a decline in the non-conventional oil extraction sector, which saw maintenance shutdowns and production difficulties in April.

Mining and quarrying also declined 3.4%. However, activity in the support industries around mining and oil and gas extraction bounced back with a 9.9% increase after four consecutive months of decline.

A 1.6% gain in wholesale trade helped offset some of the weakness elsewhere, though retail trade fell 0.2%.

The Bank of Canada unexpectedly cut interest rates in January to guard against the drop in oil, a major export for Canada.

Heading into Tuesday’s report, the bank was expected to keep rates at 0.75% at its next meeting in mid-July, when it will also update its economic forecasts. The bank’s last forecast put second-quarter growth at 1.8%.