GDP better than expected in Q1

Real GDP growth in Canada came in at -5.4% (annualized) for the first quarter of 2009. It turns out that my forecast of -8.2% was off by a wide margin. Thankfully, I had prestigious company with David Wolf (Merrill Lynch), Marc Carney and the Parliamentary Budget Office all missing substantially on the low side. The figure below shows how some prominent (and not so prominent) forecasters performed for Q1 Real GDP growth - I'll spoil the surprise - we still (mostly) suck at forecasting GDP.

I haven't had time to delve into the details, but much of the surprise seems to have come from higher than expected consumer spending. Personal consumption expenditures were actually less of a drag on growth in Q12009 than in Q42008. Investment was atrocious, as expected and growth was helped out a little by imports falling more than exports.

A lot going on in the economy these days - loonie above 90 cents, 10-year yields rising rapidly -which means I'll be updating my forecast this week. Stay tuned.