OTTAWA – Canada’s economy suffered through its worst quarter in more than a year during the first three months of 2014, as activity slowed in many key sectors, particularly business investment.
Due in part to the unusually harsh winter, economic growth fell to a surprisingly weak 1.2 per cent annualized rate, the slowest quarterly pace since the fourth quarter of 2012, when the growth rate was 0.9 per cent.
As well, for the month of March, gross domestic product inched forward by only 0.1 per cent, suggesting a weak hand off to the second quarter.
Statistics Canada also revised downward the fourth quarter growth rate from the previously reported 2.9 to 2.7 per cent, and January’s strong 0.5 per cent GDP reading was trimmed back to 0.4.
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– Sliding reserves
By Khurram Husain
In case you missed it, the sign said Caution: steep slope ahead. Next to the sign there was a small picture of a sharp downward slope. It was placed there to warn travelers on this road that they should brace themselves for a steep descent that could test the traction on their tires.
The steep slope ahead is the decline in our foreign exchange reserves that have, in the first quarter of the fiscal year, dropped by more than what our financial managers had bargained for. With our old friend, the current account deficit, back in our lives again and that fair weather mistress — foreign inflows — having reliably and predictably abandoned us one more time, the drop in our reserves should become a serious worry.
Read more » The Express Tribune
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