The economy of Canada contracted modestly in the month of February as investors kept a close watch on global growth numbers in 2019.
Statistics Canada reported Tuesday that Canada’s GDP was down 0.1 percent in February, missing consensus economist expectations of 0.1-percent growth. Mining, quarrying and oil and gas extraction continued to be a weak point for Canada, declining for the sixth consecutive month.
“It was actually a broad-based decline in mining and quarrying attributed to weaker international demand that drove that sector,” CIBC Capital Markets analyst Royce Mendes said in a note, according to Yahoo Finance Canada.
February’s 0.1-percent decline comes after Canada posted a 0.3-percent GDP gain in January.
Earlier this month, the International Monetary Fund cut its 2019 global growth forecast from 3.5 percent to 3.3 percent. The IMF specifically mentioned trade disputes between the U.S., Canada and Mexico as a headwind to global economic growth.
“Failure to resolve differences and a resulting increase in tariff barriers above and beyond what is incorporated into the forecast would lead to higher costs of imported intermediate and capital goods and higher final goods prices for consumers,” the IMF said.
The IMF cut its 2019 U.S. GDP growth forecast from 2.5 percent to 2.3 percent and its Eurozone growth forecast from 1.6 percent to 1.3 percent.
In March, the U.S. Federal Reserve cut its 2019 GDP growth forecast from 2.3 percent to 2.1 percent.
Despite the difficult economic environment, the iShares MSCI Canada Index EWC traded higher by 0.1 percent Tuesday and have rebounded by 19 percent year-to-date after a steep December sell-off.
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