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- Canada’s economy shrinks 2.1 percent q-o-q in Q1
Canada’s economy shrinks 2.1 percent q-o-q in Q1
Statistics
Canada announced on Friday that the country’s gross domestic product (GDP) dropped
7.2 percent m-o-m in March after a revised 0.1 m-o-m advance in February (originally,
unchanged m-o-m).
That was better
than economists’ forecast for a decline of 9.0 percent m-o-m, but marked the
steepest monthly contraction on record.
In the first
quarter of 2020, the Canadian GDP fell 2.1 percent q-o-q, following a 0.1
percent q-o-q growth in the fourth quarter of 2019. That was the sharpest drop since
the first quarter of 2009.
According to
the report, the q-o-q downturn in GDP reflected measures imposed in March to
contain the pandemic, such as school and non-essential business closures,
border shutdowns, and travel restrictions, as well as events earlier in the
quarter, mainly the Ontario teachers' strike and rail blockades in February. Household
spending reduced by 2.3 percent q-o-q in the first quarter, the steepest
quarterly drop ever recorded, while governments' final consumption expenditure decreased
1.0 percent q-o-q, the largest decline since the first quarter of 2013,
reflecting school closures and curtailed government administration. Exports dropped
3.0 percent q-o-q, and imports declined 2.8 percent q-o-q, as the country's major trading
partners implemented similar public health measures.
Expressed at an
annualized rate, Canada’s GDP declined 8.2 percent in the first quarter after a
revised 0.6 percent increase in the previous quarter (originally a 0.3 percent
rise), compared to economists’ forecast of 10.0 percent contraction.
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