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Roundup: Canada's GDP grows by 1.2 pct in 2015

Xinhua, March 2, 2016 Adjust font size:

Canada's gross domestic product (GDP) grew by 1.2 percent for 2015 as a whole, about half the pace seen in 2014 as business investment dwindled and exports shrank, Statistics Canada reported Tuesday.

The country's economy expanded at an annualized rate of 0.8 percent in the fourth quarter of 2015, a slowdown from 2.4 percent in the third quarter but still much better than what economists had been expecting, according to Statistics Canada.

Lower final domestic demand and exports both contributed to the slower growth. Exports declined by 0.6 percent between October and December, but imports were down by almost four times that much. The falling Canadian currency was a factor in that, as Canadians became acutely aware of the Canadian dollar's diminished buying power during the period in question.

The loonie actually rallied Tuesday as growth exceeded Bay Street's low expectations, gaining a quarter of a penny to trade above the 74 U.S. cents level. Earlier it had risen even further to its highest point in three months.

The report said the 2015 reading was dragged down by a contraction of 4.8 percent in business gross fixed capital formation, a category that includes buildings, machinery and intellectual property.

The agency said the first decline after five consecutive years of increases was mostly due to a 12.7 percent drop in business investment in non-residential structures. Meanwhile, Canada's terms of trade shrank by 6.9 percent last year, which followed a 1.3 percent decrease in 2014.

The weak showing for December means that for 2015 as a whole, Canada's economy expanded by 1.2 percent, less than half of the 2.5 percent growth for 2014. Before that, the economy grew 2.2 percent in 2013, 1.7 percent in 2012 and 3.1 percent in 2011.

It's also exactly half as much as the U.S. economy grew by last year. In 2015, the real U.S. GDP increased 2.4 percent, the same rate as in 2014.

Canada's economy contracted in the first two quarters of 2015, marking a technical recession as it was hit by the drop in the price of oil, a major export. The renewed downturn in oil prices has raised concerns that growth could remain weak this year.

"We look for no improvement this year, although the better tone to end last year has prompted a mild upgrade for our 2016 call to 1.2 percent (from 1.0 percent)," said BMO economist Doug Porter.

The data were released as the Canadian federal government prepares a spring budget expected to contain billions worth of commitments -- such as infrastructure spending -- that it insists will help revive economic growth and create jobs. The budget date is March 22.

Data show Canada's GDP at market prices for 2015 is 1,768,242 million Canadian dollars (1,308,499 U.S. dollars). According to latest data, the population of Canada is 35,986,000, which means GDP per capita in Canada is 49,137 Canadian dollars (36,361 U.S. dollars).

Statistics Canada said in February that the foreign-controlled asset share edged down from 18.5 percent in 2012 to 18.2 percent in 2013, with U.S.-controlled enterprises continued to account for the largest share of assets with a 49.4 percent. Endite