Canada’s real gross domestic product grows by 0.5 percent in Q2
(MENAFN) Canada's real gross domestic product (GDP) experienced a growth of 0.5 percent in the second quarter of this year, according to the latest data released by the country's statistical agency on Friday. This represents a slight acceleration compared to the 0.4 percent increase in GDP observed during the first quarter. The modest growth in the second quarter reflects a mix of positive contributions from several sectors, despite some areas of weakness that moderated the overall expansion.
The rise in GDP during the second quarter was driven primarily by increased government final consumption expenditures, alongside higher business investment in engineering structures and machinery and equipment. Additionally, household spending on services contributed to the overall economic growth. However, these gains were partially offset by declines in exports, a slowdown in residential construction, and reduced household spending on goods, which tempered the overall pace of economic expansion, as highlighted by Statistics Canada in their report.
A closer look at the second quarter's data reveals that government expenditures saw a significant rise, increasing by 1.5 percent. This uptick in government spending was complemented by a robust 6.5 percent increase in business investments in machinery and equipment, indicating a strong commitment to capital investment in these areas. These factors played a crucial role in supporting economic growth during the quarter, even as other sectors faced challenges.
On the other hand, household spending growth showed signs of slowing down during the April to June period, increasing by just 0.2 percent, compared to a more substantial 0.9 percent rise in the previous quarter. This deceleration in household spending highlights a shift in consumer behavior, possibly due to economic uncertainties or changing market conditions. Despite this slowdown, household expenditures on services remained a key driver of GDP growth, balancing out some of the negative impacts from other sectors such as exports and residential construction.
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