| OTTAWA, April 28
OTTAWA, April 28 The Canadian economy stalled in
February after a healthy start to the year but is still on track
to meet and possibly exceed the Bank of Canada's forecast for
first-quarter annualized growth, analysts said.
Statistics Canada said on Friday that February gross
domestic product was flat, matching the forecast of analysts in
a Reuters poll. This followed three months of consecutive gains,
including a 0.6 percent jump in January.
The Bank of Canada, which cut rates twice in 2015 and has
consistently stressed the downside risks to the economy,
predicted on April 12 that first-quarter annualized growth would
be 3.8 percent.
Derek Holt, head of capital markets economics at Scotiabank,
said that even if March growth came in flat as well, annualized
first-quarter growth should be around 4 percent, an estimate
matched by other analysts.
"It is a soft month in an otherwise solid quarter. Some
moderation was expected after the torrid pace of growth in
January," he said in a phone interview.
Bank of Canada Governor Stephen Poloz said on April 12 that
it was too early to conclude the economic growth is sustainable.
Most economists do not expect the central bank to hike rates
until next year.
The Canadian dollar was little changed after the news,
trading at C$1.3634 to the U.S. dollar, or 73.35 U.S. cents.
Statscan said service-providing industries advanced by 0.2
percent in February on strength in the real estate and rental
and leasing sector, as well as the finance and insurance sector.
Goods-producing industries declined by 0.3 percent on weaker
manufacturing as well as mining, quarrying and oil and gas
"One can't be too disappointed in an economy that takes a
one-month breather after a stunning three-month run," said Avery
Shenfeld, chief economist at CIBC Capital Markets, who also.
Separately, Statscan said Canadian producer prices rose in
March for the seventh month in a row, increasing by 0.8 percent
from February in part on higher prices for motorized and
(Additional reporting by Fergal Smith in Toronto; Editing by