At first glance, the 2.9% annualised gain in fourth-quarter GDP suggests that the economy is on the right track. Unfortunately, growth was once again dependent on spending by heavily-indebted households and inventory building, with business investment contracting for the third consecutive quarter. Accordingly, we suspect that the Bank of Canada will be forced to repeat in its policy statement next week that there are still few signs of the rebalancing it is pinning its hopes on.
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