Early indicators from Statistics Canada on show the country’s economy is slowing but might not be in recession territory yet.
The agency released new gross domestic product (GDP) data on Tuesday, showing the economy grew at a rate of 0.1 per cent in November.
Early indications show that the country’s GDP was essentially unchanged for December.
Overall, StatCan said advance information suggests a 1.6 per cent annualized increase in GDP for the fourth quarter of the year and annual growth of 3.8 per cent in 2022.
Economic growth is expected to slow in response to higher interest rates, with many economists anticipating a mild recession this year. A recession is traditionally defined as two consecutive quarters of negative GDP growth.
“Overall, today’s data show that the Canadian economy continues to cool, but not as yet shift into reverse, in the face of rising interest rates,” said CIBC Senior Economist Andrew Grantham in a note to clients Tuesday.
The Bank of Canada has raised its key interest rate eight consecutive times since March, bringing it to 4.5 per cent, the highest it’s been since 2007.
After hiking interest rates last week, the central bank signalled it would take a pause to assess how higher interest rates are affecting inflation and the economy.
In November, growth in real domestic product was driven by the public sector, transportation and warehousing and finance and insurance.
Meanwhile, construction, retail and accommodation and food services contracted.