Canada's economy grew faster than expected in the third quarter, according to data on Friday, but cheaper oil prices add to the likelihood the Bank of Canada will not consider higher interest rates anytime soon despite the recent run of strong figures.
At 2.8%, third-quarter growth eclipsed a 2.1% market forecast and the Bank of Canada's 2.3% estimate, following 3.6% in the second quarter.
The Bank of Canada is forecast to keep interest rates on hold next Wednesday and focus will be on how Governor Stephen Poloz interprets the recent data.
Canada's growth in real gross domestic product fell short of the 3.9% in the United States for the quarter, but U.S. strength spilled over the border, as Canadian goods exports rose by an annualized 9%.
Business capital investment rose by 5.9%, the highest since the first quarter of 2012. However, most of this was not in machinery and equipment but in residential construction, which rose an annualized 12.5%.
Household consumption rose by 2.8%.
Lower oil prices will also take pressure off overall inflation which, at 2.4% in October, exceeded the central bank's target of 2.0%.
However, Canadian crude prices have not done as poorly as world benchmarks, because the discount for Canadian oil has shrunk as an increasing amount of crude gets shipped by rail.
