Canada GDP drop cools talk of rate hikes

Canada's economy unexpectedly shrank in February, disappointing markets and cooling talk that the Bank of Canada could start raising interest rates in the near future.

Statistics Canada said gross domestic product dropped by 0.2 percent in February from January, surprising analysts who had been expecting a 0.2 percent increase.

Statscan cited factors such as temporary closures in the mining and other goods-producing industries. Year-on-year growth was an uninspiring 1.6 percent, the weakest since the 1.2 percent recorded in January 2010.

Analysts said the data would provide food for thought at the Bank of Canada, which has warned recently that higher interest rates may be necessary to deal with a recovering economy and higher inflationary pressures.

Read Full Article from Reuters

- Posted: 2012-04-30 10:04:52

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