The Canadian economy suffered its worst three-month stretch on record in the second quarter as the economy came to a near halt in April before starting to recover in May and June.
Statistics Canada said Friday real gross domestic product contracted at an annualized rate of 38.7 per cent for the quarter, the worst posting for the economy dating back to when comparable data was first recorded in 1961.
Almost every single component of the economy used to calculate GDP was at its lowest point during the three-month stretch — driven largely by widespread lockdowns in April meant to slow the spread of COVID-19.
However, economic output rebounded in May by 4.8 per cent, and the agency said June saw an increase of 6.5 per cent, a monthly record, beating the 5.6 per cent preliminary forecast.
The agency’s preliminary estimate for July indicated a three per cent increase in real GDP, which on its own would have been a monthly record prior to this year, BMO chief economist Douglas Porter said.
The economy is starting to come back faster than most expected, and the decline in the second quarter wasn’t as steep as predicted, he said.
“That means that the damage wasn’t quite as bad as we thought in the second quarter and the early stages of the rebound have gone about as well as could have been reasonably expected,” he said in an interview.
“It’s the direction here that counts.”
Even with the gains in June, economic output remains about nine per cent below pre-pandemic levels, Statistics Canada said. Gains in the third quarter likely won’t recover all that was lost as some businesses remain unable to open even as restrictions are rolled back.
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