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Canadian economy sees growth slow

31 August 10 15:52
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Canada's economic growth slowed sharply in the second quarter of the year, figures from the Canadian statistics agency have revealed.

GDP increased by 0.5% in the three months to June, down from the 1.4% growth seen in the first quarter.

That means the economy grew at an annualised rate of 2% in the last quarter - down from 5.8% in the first quarter.

Sluggish consumer spending was blamed for the slowdown.

Total spending grew by just 0.7% in the three months to June, down from 1% growth in the first quarter.

Spending on cars fell, as did household spending on electricity and gas.

Spending on furniture and other household goods rose, but only by 0.1%.

The growth figures disappointed many analysts who had expected an annualised growth rate of closer to 2.5% for the April-to-June period.

"Clearly the headline is below expectations and... sets a much more modest profile for the Canadian economy," said Doug Porter, deputy chief economist at BMO Capital Markets.

"One of the main stories here is that Canada is still a little bit stronger in the first two quarters than the US, but the gap is almost imperceptible."

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