RIYADH: Canada’s first quarter growth reportedly missed the mark mainly due to a drop in export volumes. The Czech economy expanded quicker than expected in the first quarter driven by household consumption whereas China’s services sector activity contracted less sharply in May. Portugal’s May inflation level recorded the highest in almost 30 years, while French inflation hit a new record of 5.8 percent in May.
Canada's economic growth was not as robust as expected in the first quarter, dragged by lower export volumes, official data showed on Tuesday, though activity was bang-on central bank projections and unlikely to sway plans for an oversized rate hike in June.
The Canadian economy grew at an annualized rate of 3.1 percent in the first quarter, below analyst predictions of 5.4 percent but in line with the Bank of Canada’s forecast of 3 percent, Statistics Canada data showed.
Real gross domestic product likely rose 0.2 percent in April, preliminary data showed, as a drop in resale real estate activity was offset by gains in mining and oil and gas. March GDP rose 0.7 percent, beating expectations of 0.5 percent.
Czech economy grows faster
The Czech economy expanded faster than expected in the first quarter, with household consumption a main growth driver before high inflation and interest rate hikes expected this year trigger a slowdown.
The Czech economy posted 0.9 percent quarter-on-quarter growth in the first three months of 2022, higher than a flash estimate of 0.7 percent. In year-on-year terms, growth reached 4.8 percent, above the preliminary estimate of 4.6 percent reported last month.
Central Europe’s economies have started 2022 in high gear, propelled largely by home-grown demand after COVID-induced lockdowns ended, while companies are still working through global supply disruptions and soaring energy and material costs.
But a slowdown is coming, with firms continuing to face constraints and consumers becoming more pessimistic amid price growth at its highest in decades, fast-rising borrowing costs and utility bills, and new uncertainties due to war in Ukraine.
Portugal inflation soars
Portuguese consumer prices spiked 8 percent year-on-year in May, at their fastest pace since February 1993, after rising 7.2 percent in April, flash data from the National Statistics Institute showed on Tuesday.
Core inflation, which strips out volatile food and energy prices, clocked 5.6 percent year-on-year, its highest level since October 1994.
Sanctions on Russia following its invasion of Ukraine last month have pushed energy prices to record highs across Europe, stoking overall inflation and sapping confidence.
China’s services sector
China’s services activity shrank less sharply in May, an official survey showed on Tuesday, as COVID-19 restrictions in some cities were relaxed.
The official non-manufacturing Purchasing Managers’ Index (PMI) rose to 47.8 in May, from 41.9 in April, data from the National Bureau of Statistics showed.
A reading above the 50-point mark indicates expansion in activity while a reading below indicates contraction.
Even with an easing in COVID-19 curbs across China, consumers likely avoided shopping and dining out due to fears of contracting COVID-19 and potentially being quarantined.
(With input from Reuters)