Canada's Q4 Growth Slowest Since 2003

Canada's economy grew at the slowest pace since 2003 in the fourth quarter and contracted in December as exports declined, increasing pressure on the Bank of Canada to lower interest rates., Bloomberg 3/3/2008 6:44:52 AM

Growth slowed to a 0.8 percent annualized rate between October and December, leaving the total economy at C$1.33 trillion ($1.33 trillion), Statistics Canada said today in Ottawa. The agency revised third-quarter figures to an annualized 3 percent. Economists surveyed by Bloomberg said growth would slow to 1.1 percent, the median of 20 estimates, from an initially reported 2.9 percent.

Slowing growth may prompt the central bank to lower interest rates tomorrow from the current 4 percent to boost consumer spending and business investment, analysts said before the report. Thirteen of 25 economists polled by Bloomberg predict the central bank will reduce borrowing costs by a quarter point, while 12 predicted a half-point cut.

On a monthly basis, the economy shrank 0.7 percent in December, the first decline since September 2006, from a 0.1 percent gain in November. Economists forecast growth would dip 0.2 percent, the median of 18 responses.