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Canada’s economy seen up January after strong fourth quarter -Breaking

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© Reuters. FILE PHOTO – The downtown skyline is seen above the Port Lands area of Toronto (Ontario, Canada) April 3, 2019. REUTERS/Chris Helgren

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Julie Gordon, Ismail Shakil

OTTAWA (Reuters). Despite the Omicron variant impact and protests which shut down border crossings key points, the Canadian economy was likely to start 2022 strong, with fourth quarter growth exceeding expectations. Official data were released Tuesday.

Canada’s fourth quarter GDP grew 6.7% on an annualized basis. This beat analyst expectations of 6.5%. However, January GDP was 0.2% higher than December’s stagnation, Statistics Canada data revealed.

Statscan reported that January’s growth, although it is only a preliminary estimate of the gain, means that economic activity has now risen 0.6% from pre-pandemic levels.

“The clouds have darkened a little bit just before the end, but… GDP posted a surprise 0.2% rise in January despite Omicron waves and all associated job losses,” explained Royce Mendes of Desjardins Group’s head of macrostrategies.

“The economy built on this momentum in February,” he said.

Strong fourth-quarter results were better than Bank of Canada’s January forecast of an increase of 5.8%. When it meets Wednesday, the central bank will likely raise its key rate to 0.50 percent.

Doug Porter, Chief Economist at BMO Capital Markets said that “I don’t believe the year-end figures change the Bank’s picture other than to drive home to the point the economy was still managing the grind ahead even with Omicron.”

Canadian dollars traded 0.1% lower at 1.2665 against the greenback (or 78.96 U.S. Cents).

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