Canadian economy grew in July, GDP up 0.1%

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Canadian economic activity rose surprisingly 0.1 percent in July, thanks to strong production in the oil sands, while gross domestic product was most likely flat in August, Statistics Canada data showed on Thursday.

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Analysts polled by Reuters had predicted that July’s GDP would fall 0.1 percent from June. Statistics Canada said growth in goods-producing industries more than offset the first decline in service-producing industries since January.

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Oil sands extraction rose 5.1 percent in July on higher production, partially offsetting two months of declines. The Canadian agricultural sector also contributed to economic growth, with crop production increasing by 7.2 percent, mainly due to volumes of wheat and other grains.

Demand for Canadian wheat has increased since the Russian invasion of Ukraine, which Russia calls a special military operation, pushing up export volumes.

The retail sector contracted sharply in July, falling to its lowest level since December 2021, led by a 7.1 percent drop in output at gas stations, Statistics Canada said.

Still, the August retail decline is likely to have reversed, Statistics Canada noted in its preliminary estimate.

Accommodation and food services also contracted in July, again the first decline since January, driven by less activity in bars and restaurants.

Against the greenback, or 73.02 cents, the Canadian dollar traded 0.7 percent lower at $1.3695, giving in much of the previous day’s gains.

© Thomson Reuters 2022

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