Market News

(Bloomberg) -- Canada’s economy grew at a faster pace than initially estimated over the last three years, according to annual revisions by the country’s statistics agency.

In a report Thursday, Statistics Canada said real gross domestic product rose by 1.5% in 2023, from 1.2% previously. Yearly growth was revised to 4.2% in 2022, from 3.8>#/p###

In 2021, the economy grew 6% as it bounced back from the initial pandemic shock. That’s higher than the previous estimate of 5.3%.

The data suggest Canada’s economic momentum in 2023 was stronger than first thought. It’s more evidence of the country’s resilience during the Bank of Canada’s aggressive hiking cycle, in which the policy rate rose from 0.25% to 5% in less than a year and half. 

Still, the better numbers don’t necessarily imply demand was outstripping supply by more than expected over the last three years. While the higher level of GDP will be welcome, the upward revisions were driven in part by stronger business investment, which implies higher potential growth estimates. 

Yearly growth in non-residential investment, including machinery and equipment, was revised up to 1% in 2023; previously, Statistics Canada estimated it had contracted by 0.8%. Investment growth was also revised higher in 2022, to 6.4% from 4% previously.

Household consumption growth was revised slightly higher, and imports were revised lower, the data show. 

Government expenditures were also revised higher for 2023, to 2.2% from 1.6% previously. The figure includes provincial and territorial government spending, which offset a decline in federal government spending, the agency said.

The revisions may also point to a better revenue outlook from higher taxes — a potential boon for Prime Minister Justin Trudeau’s government’s fiscal position.