Canada: Looking for real Q1 GDP to grow at a 4.0% saar - TDS

Analysts at TDS are looking for real Canadian Q1 GDP to grow at a 4.0% saar pace on the back of strong consumer spending and residential investment, with a deterioration in the trade deficit expected to provide an offset.

Key Quotes

“We are slightly below market (+4.2% Q/Q), but a 4% annualized gain would still represent the strongest quarter for economic activity in almost three years, and would also outpace the BoC’s most recent forecast of 3.8%. The monthly figures will be a bit underwhelming—we are looking for a 0.1% m/m increase in industry level GDP versus a consensus expectation of +0.2% m/m—but it will still be a strong enough hand-off to put Q2 tracking in the mid-2% range. Even if we see a slight disappointment in GDP (3.5% let’s say), it will still be an objectively strong print, which fits with the recent change in tone from the BoC.”