The Canadian economy expanded at its slowest pace in more than a year in the first quarter amid sluggish consumer spending and export growth, along with a decline in housing investment, Statistics Canada reported.
The country's GDP grew at a seasonally adjusted annualized rate of 1.3% in the first quarter, slower than the 1.7% expansion in both the third and fourth quarters of 2017. In the year-ago quarter, GDP growth was 4.0%.
Analysts at TD Securities noted that despite disappointing market expectations, Canada's first-quarter GDP kept growth tracking near 2% in the first half of 2018, in line with the Bank of Canada's expectations.
"Coupled with inflation running at target and May's hawkish communique, this keeps the door open to a July hike in our view," TD Securities analysts said in a research note.
"If anything, today's data remains consistent with cautious and gradual, and we continue to expect no more than one more rate hike this year," they added.
In the first quarter, the increase in household final consumption expenditure decelerated for a third consecutive quarter, slowing to 1.1% on an annualized basis.
Growth in the exports of goods and services also slowed to 1.7%, following a 3.9% gain in the fourth quarter of last year.
Housing investment fell 7.2% in the first quarter following a 13.5% increase in the previous quarter and 7.1% growth in the year-ago period.
On a non-annualized basis, GDP expansion in the first quarter was 0.3%, also slower than the 0.4% growth in both the previous two quarters. The Canadian economy grew 1.0% in the first quarter of 2017.
