Canada’s economic growth in the second quarter was a slam dunk, according to data released today. One reason for the growth spurt was the Toronto Raptors, who bested the Golden State Warriors in the NBA finals in June. It was the first time a Canadian team won the title in the basketball league’s history.
Canadian GDP far surpassed expectations by growing at an annual pace of 3.7% in the three months to June, compared with a more modest 2% in the US over the same period.
The bump was driven primarily by exports, but a “Raptors effect” seems to have also played a role, according to Canada’s statistics agency. “The Raptors’ playoff run coincided with the first signs of summer-like weather across many parts of the country, with increases at food services and drinking places (up 0.5 per cent) and sporting goods, hobby, book and music stores up 3.5 per cent,” the agency said.
The second-quarter growth uptick in Canada also marked a sharp acceleration from sub-1% growth in the previous two quarters. It broke a seven-quarter streak of GDP growth in the US surpassing Canada’s.
The good news might prove fleeting. The export- and Raptors-led bump masks slowing household consumption and shrinking business investment, a sign the Bank of Canada could soon join other countries—including the US—in cutting interest rates. Hopes for a repeat Raptors title next season are also looking slim, after star player Kawhi Leonard decided to leave for the Los Angeles Clippers this summer, after just one season north of the border.
Regardless, today’s data is a relief for Canadian prime minister Justin Trudeau, as it comes ahead of what is expected to be a close federal election in October.