UPDATE 3-Canada's economy disappoints in third qtr, outlook dim

Fri Nov 30, 2012 10:59am EST
 
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* Economy grew 0.6 pct in third quarter vs 1.7 pct in second

* GDP flat in September for second month in a row

* Exports, business investment, housing drag down growth

* No change seen in Bank of Canada's rate-hike stance

By Louise Egan

OTTAWA, Nov 30 (Reuters) - Canada's economy lost some fizz in the third quarter as exports suffered their biggest drop in three years and businesses scaled back investments, though the slowdown is unlikely to knock the Bank of Canada off its rate-hike stance.

The economy grew at a weaker-than-expected 0.6 percent annual rate in the July-September period, after two straight quarters of 1.7 percent expansion, according to Statistics Canada data on Friday.

Growth stalled in September for the second straight month, suggesting a weak start to the fourth quarter and possibly more sub-par growth.

Canada recovered more quickly than its developed-nation peers from the recession, but growth has been sluggish this year as businesses and individuals remain wary thanks to a choppy economic recovery in the United States and an ongoing debt crisis in Europe.   Continued...