By IANS,
Toronto : The Canadian economy bounced back with a record growth in the fourth quarter of 2009, official figures released Monday said.
Beating all predictions, the economy posted an annualized growth rate of five percent in the last quarter of 2009, beating the Bank of Canada’s forecast of just 3.3 percent growth for the quarter. Overall, the nation’s GDP increased 1.2 percent in the fourth quarter.
This is the largest quarterly economic growth since the third quarter of 2000, according Statistics Canada.
Though the country’s central bank – the Bank of Canada- announced late last year that the economy is out recession, Monday’s unexpected results confirm that the most robust of the G8 economies is now back on the growth trajectory.
The booming housing sector on low interest rates, the returning consumer spending and rising export and imports spurred the record quarterly growth.
“For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures, and investment in residential structures. Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter,” the official report said.
While the housing sector is still in deep crisis in the US, investment in this sector rose by 6.5 percent in the fourth quarter on increased demand. Exports too were up 3.7 percent during the period.
Monday’s results fuelled fears that the central bank might raise interest rates from the historic low of 0.25 percent. The Bank of Canada had pumped not only billions into the economy but also cut interests to the historic lows when the global meltdown hit Canada.
The central bank may announce changes in its policy Tuesday. The unexpected results strengthened the Canadian dollar against the US greenback, with the loonie (as the Canadian dollar is called) rising from 94.98 US cents to close the day at 96.01 US cents.