Canada’s economy slows during Q1

Canadian economic growth has slowed to the lowest level for nearly two years. Gross domestic product (GDP) grew at an annualized pace of 1.3 per cent in the first quarter, down from 1.7 per cent in the fourth quarter of 2017.

The rate of growth fell short of economist predictions, who expected the economy to grow at an annualized rate of 1.8 per cent during the first quarter of the year.

The economic slowdown has been attributed to a sharp decline in housing investment following the implementation of tougher mortgage lending rules, which now require more borrowers to undergo stress tests, leading to a cooldown in the housing market.

According to RFi Group data, just over 1 in 10 retail banking customers that are intending to take out a new product in the next 6 months are likely to take out a mortgage, a decrease of 2% over the past 6 months.

This highlights the reduced propensity of Canadian consumers to take out a mortgage following the tightening of stress testing criteria.

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