Statistics Canada will release on Friday the gross domestic product figures for Q1 on a complete expenditure accounts basis, plus monthly GDP estimates for March, April, and any revisions to prior months, said Scotiabank.
They will be backward-looking, but a round of GDP figures will help the bank understand more about the momentum into the commodities shock. Scotiabank will learn more about how much net slack there is in the Canadian economy and more about how the domestic economy is performing, and over which the Bank of Canada has more influence than GDP.
GDP is estimated to have grown by roughly 2% quarter over quarter at a seasonally adjusted and annualized pace in Q1, stated the bank. The consumer is tracking solid growth.
Whether that continues or not is unclear after early guidance that Q1 strength was followed by somewhat of a setback in April. When oil prices surged in anticipation of Russia's invasion of Ukraine and the aftermath in 2022, Canadian consumers reacted by pushing their saving rate close to zero and rebuilding it later. The saving rate, like currencies, serves as a shock absorber at least for a time.
There may be a reversal of the inventory drag effect that held back Q4 GDP growth, but that might be offset by a surge in imports that serves as a leakage effect on GDP growth, it pointed out.
As for March monthly GDP on an income basis, StatsCan had said toward the end of April that it was tracking 'essentially unchanged' as a rough guide. That was based upon trade-offs it loosely described as driven by gains in sectors like wholesale and transportation versus weakness in resources. There might be upside based upon the bank's tracking of available activity readings.
April GDP, however, is a "total wildcard," added Scotiabank. StatsCan will release its preliminary estimate without details. It's important because it will help to inform momentum into Q2 GDP tracking.