Canadas economy likely grew by 5.6% in first quarter

div classBodysc17zpet90 cdBBJodivpBy Julie Gordonp

pOTTAWA Reuters – The Canadian economy most likely grew by 5.6 on an annualized basis in the first quarter, Statistics Canada said on Friday, as growth in February beat expectations and real gross domestic product was seen increasing again in March.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe economy grew by 1.1 in February, ahead of analyst forecasts of 0.8, on broadbased increases as pandemic measures were loosened. The economy likely grew 0.5 in March, Statscan said in flash estimate, the 10th monthly expansion in a row.p

pThe undoing of Omicronrelated public health restrictions, imposed in December and January, reversed the fortunes of clientfacing industries in February, said Statscan.p

pThe accommodation and food services sector jumped 15.1, clawing back nearly all the declines of the previous two months. Transportation jumped as people returned to trains and planes, and the arts, entertainment and recreation sector bounced back.p

pConstruction expanded again, while the real estate sector gained on surging home resale activity. Housing demand also buoyed the finance and insurance industry, as home buyers rushed to lock in mortgages ahead of rate increases.p

pThe strong February results and firstquarter estimate will likely reinforce bets the Bank of Canada will go ahead with another supersized rate rise on June 1. It made a rare 50 basis point increase earlier this month.p

pThe Canadian dollar held onto earlier gains, up 0.5at 1.2740 to the greenback, or 78.49 U.S. cents.