"Gross domestic product contracted at an annualized pace of 0.6 per cent in the October-December quarter, the data agency said, compared with a revised 2.4 per cent increase in the prior quarter. This brings the country's overall growth in 2025 to 1.7 per cent, the slowest pace of annual growth since the decline in 2020."
"Businesses withdrew $23.46 billion from their inventories at an annualized pace, almost matching the 2024 Q4 number, when companies raced to beat incoming U.S. tariffs by supplying products from inventories. The companies had been actively adding to their inventories in the previous two quarters before the fourth quarter."
"Even though exports, household spending and government investment aided growth, it was not enough to offset the big dent caused by the impact of inventory drawdown last quarter. Besides inventory impact, investments into building of apartments, condos and houses were the only other major factor that pulled the GDP down in the fourth quarter."
Canada's gross domestic product contracted at an annualized rate of 0.6% in the fourth quarter of 2024, falling below analyst expectations of flat growth. The primary driver was a substantial inventory drawdown of $23.46 billion as businesses depleted existing stock to meet demand rather than increasing production. This followed two quarters of inventory accumulation. Residential investment also declined 4.4% annually. Despite positive contributions from exports, household spending, and government investment, these gains could not offset the inventory impact. The contraction brings 2025 annual growth to 1.7%, marking the slowest pace since the 2020 economic decline. The Bank of Canada's projection of 1.7% growth for the year aligns with actual results.
Read at www.cbc.ca
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