MNI PREVIEW: Canada GDP Growth Expected to Slow to Near-Halt

By Jay Zhao-Murray

     OTTAWA (MNI) - Canada's economy is expected to nearly halt in May on

weakness in wholesale and retail sales.

     Gross domestic product will increase 0.1% in May according to the MNI

economist median, following gains of 0.3% in April and 0.5% in March. 

     Advance reports for May showed wholesales sales down 1.8%, the biggest drop

in over three years. Retail sales fell 0.1%, but after stripping out price

changes the volume of sales was far worse with a 0.5% decline. What keeps the

economy growing for a third straight month is a 1.6% gain in factory sales and

signs that homebuilding advanced. 

     Even a modest expansion for May will still keep the economy on track for

annualized growth around the Bank of Canada's forecast of 2.3%, economists

predict.

     Other major central banks have signaled intentions to add monetary

stimulus, but the Bank of Canada diverged from its peers by keeping interest

rates on hold in July. Bank officials said the level of stimulus was

"appropriate," noting recent domestic strength and growing risks from global

trade tensions.

     The report from Statistics Canada in Ottawa is due at 8:30am New York time

on Wednesday.

--MNI Ottawa Bureau; +1 613-314-9647; email: jay.zhaomurray.ext@marketnews.com

[TOPICS: MACDS$,M$C$$$]