Canada’s economy contracted unexpectedly in the second quarter of this year. During this time, the growth of this North American industrialized country has been 0.2 percent.
On Friday, Reuters reported that Canada’s growth was almost zero in July.
It is also said that in such a situation, the central bank of Canada may have to come forward to cut a possible economic recession.
The Bank of Canada forecast said that the country’s growth in the second quarter of the year could be 1.5 percent. On the other hand, analysts thought it could be 1.2 percent.
Compared to last May, GDP decreased by 0.2 percent in June.
Stephen Brown, deputy head of the North American Economist for Capital Economics, told the news agency, ‘Canada is already in a moderate economic recession. There is some doubt as to whether the Bank of Canada will keep interest rates unchanged next week.’
Statistics Canada, the country’s statistical agency, said the slowdown in the economy was due to lower investment in the housing sector as well as lower exports and daily consumer spending.
The agency also said that investment in the housing sector has declined due to less construction of new infrastructure and less renovation of old infrastructure.
Last June, fires broke out in several regions of Canada, which adversely affected the country’s mining, quarrying and rail communications.
Due to these reasons, the price of the Canadian currency has decreased by 0.5 percent against the US dollar. The Canadian dollar also fell against the currencies of 10 other industrialized countries.
“The overall picture looks like Canada will need to pick up momentum to deliver positive growth in the third quarter,” Doug Porter, chief economist at BMO Capital Markets, told Reuters.