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“We expect business investment to remain weak as uncertainty persists and exports to grow only slowly,” Macklem said, according to acopy of his remarks. “When we add it up, the Governing Council projects that the economy will still be operating below its potential into 2023.”
Some of the growth through the summer months was generated by hard-hit businesses that are once again subject to restrictions, such as bars, restaurants and gyms. Other sectors, like education, have had one-off booms in activity.
Statistics Canada said the education industry expanded by 3.4 per cent in August as schools prepared for students to return to classrooms. This activity, the agency said, “partly contributed to an atypical August increase in an atypical year as educational services continue to recover from low spring levels.”
Bank of Montreal chief economist Douglas Porter on Fridaysaid he suspects that fewer restrictions, ongoing financial support from governments and the way that consumers and businesses have adapted to the pandemic could make for a more forgiving slowdown.
Porter and BMO expect “modest growth overall” for the fourth quarter of 2020, although that forecast could be subject to pandemic-caused uncertainty.
“While no big surprise, the August GDP report (and September flash) is another signal that the Canadian economy responded to the initial reopening with more force than generally expected,” he said. “The way forward has been deeply clouded by the second wave and renewed restrictions, so growth will cool considerably in (the fourth quarter).”
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