Canada’s economy rebounded from Omicron in February, growing at the fastest pace in a year

Canada’s economy grew 1.1% in February, its fastest pace in a year, as businesses rebounded from previous lockdowns and restrictions put in place to deal with the Omicron variant of COVID-19 .

Statistics Canada reported on Friday that nearly three-quarters of the sectors it tracks have seen production rise.

Preliminary data from March suggests Canada’s gross domestic product rose another 0.5%, the data agency said.

The services sector, which had been hit by a series of shutdowns linked to the emergence of Omicron in December and January, rebounded in February with an expansion of 0.9%.

The accommodation and food services sector jumped 15.1%. The arts, entertainment and recreation sector gained 8.4% during the month, while rail transportation increased by 9.1% and air transportation by 7.7%.

Goods-producing industries also got in on the action, advancing even more than the services sector, up 1.5% in the month. The mining, quarrying and oil and gas sector increased by 3.4%.

Exceed expectations

After January’s lows, economists expected the economy to grow around 0.8%, but the GDP figure beat those expectations.

The compilation of data for the three months of January, February and March puts the economy on track to expand 5.6% in the first quarter, nearly double the 3% expansion forecast by the Bank of Canada , said Royce Mendes, economist at Desjardins.

The numbers make it even more likely that the central bank will hike rates to calm things down, he said.

“The Bank of Canada has set the table for a 50 point hike in June, but data like this will at least have some chance that markets will assess that central bankers need to act more aggressively,” Mendes said. .

WATCH | Why inflation hit its highest level in 30 years:

Canada’s inflation rate climbs to 6.7%, the biggest jump since 1991

Canada’s inflation rate climbed to 6.7% in March, reaching a 31-year high. Economists are warning borrowers to expect further interest rate hikes as the Bank of Canada attempts to rein in rising inflation. 2:00