By Promit Mukherjee and Ismail Shakil
OTTAWA (Reuters) -Canada’s gross domestic product expanded at a faster-than-expected 0.2% rate in July, but an advance estimate indicated that growth likely stalled in August, data showed on Friday, bolstering hopes for a super-sized interest rate cut next month.
Economists welcomed the July growth but looked at it mostly as a blip sandwiched between two months in which activity was flat and reiterated that GDP would fall well below the Bank of Canada’s third-quarter estimate.
“Growth appears to be tracking just over 1% for Q3, well below the Bank of Canada’s 2.8% forecast,” Royce Mendes, head of macro strategy at Desjardins Group, wrote in a note.
He said he expected the Canadian central bank would deliver a 50-basis-point rate cut on Oct. 23.
Analysts polled by Reuters had forecast GDP would rise 0.1% in July, after zero growth in June.
The economy grew in July despite the negative impact of…
