UPDATE 2-Canada GDP rises 0.2 pct in May, 2nd quarter looks soft

Wed Jul 31, 2013 9:59am EDT
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* Growth is less than the 0.3 percent forecast

* More precise reading is 0.24 percent growth in May

* June expected to be soggy due to flood, strike

* C$ softens on Canada, U.S. GDP data

By Randall Palmer

OTTAWA, July 31 (Reuters) - The Canadian economy grew by 0.2 percent in May from April, according to Statistics Canada data on Wednesday, below forecasts and dampening expectations for the second quarter.

The fifth consecutive monthly increase beat the 0.1 percent rate registered in April, but the median forecast in a Reuters survey was for 0.3 percent growth, ahead of what is expected to be a poor June reading due to floods and a Quebec labor strike.

The headline figure for May was rounded down from a more precise reading of 0.24 percent growth.

Some economists had begun to question whether the Bank of Canada's prediction for second-quarter growth of an annualized 1.0 percent would turn out to be too low. But the weaker-than-expected May data might send them back to the drawing board.   Continued...