03/03/2015 08:42 EST | Updated 05/03/2015 05:59 EDT

Canadian Economy Slowed In 4th Quarter Of 2014, But Still Beat Expectations


OTTAWA - The Canadian economy slowed to a 2.4 per cent growth rate in the last three months of 2014 — but still performed better than a consensus of experts had expected.

Statistics Canada's stronger than anticipated reading during the period of falling oil prices is yet another sign the central bank could abstain from cutting its key interest rate when it makes its decision Wednesday.

The annualized growth rate for the fourth quarter of 2014 was close to the Bank of Canada's 2.5 per cent prediction, but beat economists' call of 2.0 per cent, according to Thomson Reuters.

Led by gains in manufacturing, the gross domestic product moved upward in December by 0.3 per cent compared with the previous month, which was higher than economist expectations of 0.2 per cent.

Statistics Canada found the oil and gas extraction sector was among the primary contributors to growth in the last three months of 2014, although it dropped off in the final two months of the year.

Last week, Bank of Canada governor Stephen Poloz said January's surprise rate cut bought him time to assess how a plunge in oil prices might affect the economy leading to speculation he would not cut rates this month as many had predicted.

The central bank stunned markets in January when it dropped rates by a quarter of a percentage point to 0.75 per cent.

At the time, Poloz said the cut would buy insurance amid low crude prices that were "unambiguously negative" for the economy.

The latest Statistics Canada inflation data, also released last week, was higher than Bank of Canada had predicted — further dampening expectations of another cut.

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