Canada's Gross Domestic Product (GDP) rose 0.3% in April, in line with market expectations, as growth recovered in sectors including wholesale trade and manufacturing, and the economy may expand further in May, based on data released on Friday.
Analysts polled by Reuters had forecast GDP growth of 0.3% in the month, after no growth in March.
Growth in April, the fastest since January's 0.5%, was driven by a recovery in the wholesale trade, mining, quarrying and oil and gas extraction and manufacturing sectors, Statistics Canada reported.
In preliminary estimates for May, Statscan said GDP may have risen 0.1%, as increases in the manufacturing, real estate and rental and leasing and finance and insurance sectors were partially offset by declines in retail trade and wholesale trade.
Data on Friday put Canada's economy on track to exceed the Bank of Canada's forecast of 1.5% annual growth in the second quarter. GDP rose 1.7% in the first quarter, lower than the bank's growth forecast of 2.8%.
In April, growth was recorded in 15 out of 20 sectors.
Retail trade, helped by food and beverage retailers and petrol stations, was the main contributor to growth in April after two straight months of decline, Statscan reported. Construction and real estate as well as rental and leasing were among the sectors that weighed on growth during the month.
Overall, both the goods and services production industries grew by 0.3% in April.
The central bank cut its key policy rate for the first time in more than four years in early June, and said more cuts were possible if inflation continued to show it was on a sustained path to return to the 2% target.
The latest inflation data, however, showed consumer prices rose unexpectedly in May, prompting money markets to reduce bets on a rate cut in July to about 40%. The next rate announcement is on July 24, before which the bank will have another inflation reading, along with the jobs report for June.
