Canada GDP Research Brief

Government spending boosted GDP growth. Real gross domestic product growth accelerated, reaching an annualized rate of 2.1 per cent in the second quarter. This was driven by a 6.7 per cent increase in government consumption and investment but moderated by a modest 0.9 per cent rise in private sector spending. The restrictive monetary policy implemented by the Bank of Canada (BoC), however, continued to exert downward pressure on interest-sensitive sectors of the economy. As a result, household consumption dropped by 7.9 per cent and private residential investment declined by 7.3 per cent. Moreover, despite the completion of the Trans Mountain Pipeline boosting oil production, export activity decreased due to lower exports of automobiles and other major commodities.