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UBS Raises Canada Q2 GDP Growth Forecast to 3.2%, Sees Softer H2

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UBS Global Research raised its forecast for Canada's second-quarter growth following stronger-than-expected gross domestic product data from the country's statistical agency last week.

In a note published on Monday, the bank upgraded its Q2 growth forecast to 3.2% annualized following stronger activity data, while cutting its outlook for the second half.

"We are largely shifting the timing of activity based on the data we have in hand," wrote UBS economists in the note.

Real GDP rose 0.3% monthly in May, exceeding the initial 0.1% flash estimate, while preliminary data suggest a further 0.2% monthly increase in June, according to Statistics Canada on Friday. Combined, the monthly gains point to annualized second-quarter growth of around 3.2%.

UBS continues to expect the Bank of Canada to remain on hold for the remainder of the year.

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