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GDP growth better than expected in July

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The Canadian economy grew a better-than-expected 0.2 percent in July compared to the previous month, Statistics Canada said on Friday.

Looking at year-over figures, Canada's economy grew at a less-than-expected 1.9 percent in July.

But economists say that beat in monthly growth will likely be overshadowed by a revision to June's GDP figure, which was revised down to 0.1 percent from 0.2 percent.

“The revisions to the prior month likely tempered the good news for July, suggesting a limited market reaction this release," says CIBC economist Emanuella Enenajor,

Manufacturing was a major contributor in July, expanding 0.6 percent after contracting by 0.7 percent in June.

Retail trade was also sharply higher in July, posting 0.6-percent growth after falling by 0.1 percent in June.

Activity in the construction sector fell 0.1 percent in July, led by a decline in both residential and non-residential construction.

And activity in the real estate market continues to slowdown, with output from real estate agents and brokers down 1.5 percent -- marking the third consecutive month of declines.

BMO economist Robert Kavcic says that while July's GDP figure was "better than expected, the Canadian economy will still be hard pressed to hit the Bank of Canada’s 2 percent growth forecast in Q3 -- our call for 1.6% growth remains unchanged."

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