UPDATE 1-Canada pulls out of recession as growth resumes in 3rd quarter

Tue Dec 1, 2015 8:41am EST
 
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(Adds details from report)

OTTAWA Dec 1 (Reuters) - Canada pulled out of recession in the third quarter as an acceleration in exports and increased spending in the consumer and housing sectors revived growth, data from Statistics Canada showed on Tuesday.

The report came the day before a Bank of Canada interest rate decision. After cutting rates twice this year to offset the impact of cheaper oil prices on the economy, the central bank is widely expected to hold rates at 0.50 percent on Wednesday.

Gross domestic product increased at an annualized 2.3 percent rate last quarter, a tad shy of expectations for a 2.4 percent pace. It was also slightly below the Bank of Canada's forecast of 2.5 percent growth for the quarter.

Economic activity in September declined by a worse-than-expected 0.5 percent, providing softer momentum heading into the final quarter of the year.

Exports, a sector that is key to the central bank's outlook, climbed by an annualized 9.4 percent in the quarter, helped by an increase in shipments of goods including motor vehicles and consumer items. Exports of crude oil and crude bitumen also rose.

An increase in investment in residential construction and consumer consumption also contributed to economic growth, suggesting cheaper borrowing costs were having an effect.

(Reporting by Leah Schnurr; Editing by Lisa Von Ahn)