The Canadian economic growth seems to be slowing down since Q4 2011. The pace of GDP growth declined down to 1.9% (q/q). The PMI is around 0-0.2% while the commodities price index has been declining for 5 months.
The Core CPI stays around 0.2-0.4% (m/m), thus insuring stable annual inflation. However, retail sales show flattish dynamics, thus moving within the -0.5% - +0.4% range (m/m) over the last 5 months. This means Canadians are very careful about spending. This is explainable if to consider the fact that the annual pace of income growth is nearly equal the annual rate of inflation.
Therefore, we can conclude that businesses have no major stimuli for production expansion.
On the other hand, the domestic housing market is showing better performance.
As for the Canadian Dollar, its index is expected to decline or stay within a range till the end of summer.
