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Analysts On Disappointing May GDP Growth

CANADA
  • Real GDP is estimated to have slipped -0.2% M/M in May vs analyst expectations of a small rise, the second monthly decline the past year after the Jan Omicron hit.
  • BMO: April/May results suggest ~4% annualized growth in Q2 (had been looking for 4.5%) before slipping below 2% in Q3. Forecast GDP growth of only 1.5% in 2023. The undershooting of the BoC forecast of 6% for Q2 will be swamped by the much bigger overshoot in CPI inflation.
  • CIBC: It will do little to ease the Bank’s inflation concerns as “other than perhaps a quicker retreat in housing activity, the slower than projected growth appears to be due to supply rather than demand side factors”.
  • RBC: GDP tracking circa 4% annualized in Q2, up from 3.1% in Q1 but below our forecast for a 6.5% gain. However, despite the estimated surprise decline in May, it is still firmly above long-run capacity limits.
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  • Real GDP is estimated to have slipped -0.2% M/M in May vs analyst expectations of a small rise, the second monthly decline the past year after the Jan Omicron hit.
  • BMO: April/May results suggest ~4% annualized growth in Q2 (had been looking for 4.5%) before slipping below 2% in Q3. Forecast GDP growth of only 1.5% in 2023. The undershooting of the BoC forecast of 6% for Q2 will be swamped by the much bigger overshoot in CPI inflation.
  • CIBC: It will do little to ease the Bank’s inflation concerns as “other than perhaps a quicker retreat in housing activity, the slower than projected growth appears to be due to supply rather than demand side factors”.
  • RBC: GDP tracking circa 4% annualized in Q2, up from 3.1% in Q1 but below our forecast for a 6.5% gain. However, despite the estimated surprise decline in May, it is still firmly above long-run capacity limits.