Desjardins Group: Bank of Canada May Hike Again in December Despite Weak GDP

According to Jin10, Desjardins Group still expects the Bank of Canada to raise interest rates again in December despite weak GDP data. Statistics Canada reported that GDP by industry was unchanged month over month in August, missing market expectations for 0.2% growth. Preliminary data indicate GDP may contract in September. Canada’s annualized GDP growth in the third quarter is expected to be 1.3%, well below the Bank of Canada’s previous forecast of 2%. Economist Tiago Figueiredo said August’s weak GDP performance was mainly due to declines in public administration and wholesale trade activity. The decline in public administration activity reflected the gradual end of census-related work. He added that wholesale trade transaction values were still up sharply over the past 12 months and said Bank of Canada officials may continue to focus on emerging inflationary pressures.