Royal Bank of Canada (RBC) economists Claire Fan and Abbey Xu expect Canadian GDP to be essentially flat in January after December’s 0.2% gain, with weakness concentrated in autos and housing but offset by energy and retail. They see early indicators, including RBC card data and Statistics Canada advances, pointing to a partial rebound in February and Q1 growth roughly in line with forecasts.

GDP stalls but signs of recovery

"In line with Statistics Canada’s advance estimate, we expect GDP growth to have slowed to essentially flat in January after rising 0.2% in December."

"Early indicators, however, point to a partial rebound in February as disruptions unwound."

"Spending resilience appears to have extended into February."

"The Bank of Canada flagged downside risks to their 1.8% annualized GDP growth forecast for Q1 at the March meeting."

"After a weak January, improvements in activities in February and March as auto disruptions eased should still leave growth on balance in line with our forecast for a modest increase."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)