Canada’s economic growth stagnated in the fourth quarter as gains in investment and consumer spending were blunted by companies scaling back inventories, suggesting there’s little momentum early this year.
Canada is more vulnerable to a global slowdown than it was in 2009, when it emerged from a recession before other Group of Seven countries, because the levers policy makers pulled then would be less effective now, say economists at two of Canada’s largest banks.
Canadian Finance Minister Jim Flaherty said he will delay plans to balance the federal budget by one year and run larger than expected deficits as lower commodity prices and slower growth hamper the finances of the only Group of Seven country with a stable AAA debt rating.
Canada had an unexpected trade deficit in April on a drop in foreign sales of transportation equipment such as aircraft. Statistics Canada also revised data for the prior two months, turning surpluses into deficits.