How Canada’s largest strike will affect its economy – Report

Bisola David
Bisola David
How Canada's largest strike will affect its economy - Report

Analysts have predicted that the largest strike in Canadian history, which is currently on the tenth day, will have an impact on this month’s growth.

With the overall effect being a lower start to the second quarter than had been anticipated, the Canadian economy grew less than expected in February from the previous month due to a drop in its GDP and it is projected to drop more in March.

Following a downwardly revised 0.6 percent expansion in January, the gross domestic product increased by 0.1 percent in February, less than the 0.2 percent increase predicted by analysts.

According to a preliminary estimate by Statscan, the March GDP was most likely down 0.1 percent.

From the flash estimate for March, which could vary when the full results are announced next month, the economy probably expanded by 2.5 percent on an annualized basis in the first quarter.

Tax returns and passport renewals are part of the services being impacted by the strike by employees of the federal government who are represented by the Public Service Alliance of Canada.

The central bank, which had been raising rates at a record rate during the previous year in an effort to slow the economy and lower prices, was the first significant central bank to halt its tightening campaign and announce it would not raise rates if inflation continued to fall as anticipated.

The last three quarters of this year could see positive but weak growth, according to the bank.

The industry that produces goods in Canada grew by 0.1 percent in February, as well as the sector that provides services.

The public, construction, banking, and insurance sectors all saw increases in February, while the wholesale and retail trade sectors experienced declines.

Reductions in the retail and wholesale trade sectors in March most likely had an influence on GDP, according to Statscan.

After reaching its lowest level in a month, the Canadian dollar was trading 0.3 percent down at 1.36 to the US dollar, or 73.37 US cents.

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