As was widely expected, the Canadian economy contracted in the second quarter, declining 0.5 per cent on an annualized basis following a 0.8 per cent contraction in the first quarter. A second consecutive quarterly decline fits what some call the technical or statutory definition of a recession.
While some may quibble over whether the economy was in recession, technical or otherwise, economic growth was undeniably weak for the first five months of the year. However, the downturn was quite modest compared to the severe recessions of the early 1990s or the 2008 financial crisis.
On a positive note, monthly GDP for June posted its strongest growth in over two years, breaking a string of 5 straight monthly contractions and surging 0.5 per cent on a monthly basis. Moreover, export growth contributed positively to GDP in the second quarter after posting a sharp decline to start the year and consumer spending continues to be robust. We expect that the Canadian economy will continue to accelerate into the third and fourth quarter with real GDP growth for the year registering just over 1 per cent.
Copyright BCREA - reprinted with permission