Desjardins Group expects the BOC to raise rates in December despite soft GDP.
Statistics Canada showed industry GDP flat MoM in August (market had looked for
+0.2%); preliminary September data point to a contraction, implying Q3
annualized GDP near 1.3% versus the BOC’s prior 2% projection. Desjardins
Economist Tiago Figueiredo said August weakness reflected declines in public
administration (census-related work winding down) and a pullback in wholesale
activity, though wholesale sales remain markedly higher on a 12-month basis. He
argues BOC officials may still focus on inflation emerging pressures, keeping
the door open to a December hike.
