The Canadian economy expanded faster than predicted in the second quarter, thanks to increased public spending, industry investment, and household spending on services, the national statistics agency reported on Friday.
Gross domestic output increased by 2.1 percent on an annualized basis, but GDP per capita fell for the fifth straight quarter.
Analysts projected that GDP would rise by about 1.5 percent in the second quarter.
The GDP statistics come as Canada’s central bank prepares to publish its monetary policy next week, with observers predicting a third consecutive reduction in its benchmark lending rate.
In July, the Bank of Canada set the rate at 4.5 percent, observing that inflationary pressures were moderating.
“Real GDP increased by 2.1 percent, exceeding both private sector economists’ expectations and the Bank of Canada’s forecast,” Desjardins analyst Royce Mendes wrote in a research note.
Yet, he said, “household spending growth remained relatively slow with Canadians continuing to save a significant share of their incomes.”
According to numbers released on Friday, government spending grew by 1.5 percent in the second quarter as a result of employee wage hikes.
Canada’s statistics department also reported a decrease in exports of gold, passenger automobiles, and light trucks, while shipments of refined petroleum products were offset by greater exports of crude oil and bitumen.
Economic growth in the first quarter was revised to 1.8 percent, up from the 1.7 percent declared in May.