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Canadian GDP Growth Slows More Than Expected In January

In the above article, it says that the Gross Domestic Product (GDP) in Canada was less than what economists expect. They expected that the GDP would increase compared to the previous month, December, but in fact, it went the other way; the GDP in Canada slowed down. Economists already was expecting a modest growth of GDP to 0.2, even though in December it had a growth of 0.4 percent, but the real number for January’s GDP only had a growth of 0.1 percent. The strengths of the GDP increase came from energy, construction, forestry and financial services (mostly because it’s tax season). The weaknesses of the GDP increase mostly came from manufacturing, retail and tourism. Statistic Canada says that the natural gas demand from the USA also increased, causing a 1.5 percent increase for the month of January. On the other hand, manufacturing, especially motor vehicle production dropped 1.0 percent after two months of continuous growth. Another contribution to the GDP growth is financial services, Statistics Canada also say that for the financial services, the payroll employees overall weekly earnings rose to 0.7 percent.

In Chapter 5, it talks about GDP; how GDP is calculated or measured, all the aspects that affects the GDP. One way to measure GDP is by the following formula.

GDP =consumption + investment + government spending + (exports – imports)

In the article, it mainly talks about the consumption and investment of individuals. Consumption measures how much a consumer buys or use products or services from their country, in this case, it’s Canada. Investment defines as the capital of a business. If the economy is good, more people will choose to invest more in their companies. Due to the great business in retail for the Christmas and Year End sales, retails have increased a lot, since most people wait until those months to buy discount clothing, it’s not a surprise that retail decreased for GDP since its demand isn’t as high right after the sales season. Also, since it’s tax season, there is more demand for financial services. Many people hire accountants to do their taxes, causing a big increase of services for financial needs. With this in mind, it’s no wonder that payroll employees had an increase in wages for these months.

Overall, I think that Canada’s economy is doing really well, compared to many other countries in the world. We are ranked one of the top countries in the world to live in. Since our GDP is still improving, it is a good sign to everyone living in Canada.