Canadian economy remained flat in Q4, contracted in December

OTTAWA –

The Canadian economy stayed flat in the fourth quarter following five consecutive quarters of growth, marking a deeper slowdown than anticipated.

Statistics Canada says real gross domestic product was unchanged in the last three months of 2022, despite higher household and government spending as well as a stronger trade position for Canada.

Real GDP was weighed down by a slower accumulation of inventories by businesses along with a decline in real business investment.

The report shows a much grimmer economy than forecasters had anticipated as higher interest rates take a more noticeable toll on the economy.

In December, the economy contracted by 0.1 per cent as goods-producing industries declined.

However, a preliminary estimate from Statistics Canada suggests the economy bounced back in January with 0.3 per cent growth in real GDP.