The Canadian economy sprinted to the finish line of 2020 with nearly double-digit growth in the fourth quarter, ending its worst year on record on a strong note that has continued into the start of 2021.
The economy grew at an annualized rate of 9.6 percent over the last three months of 2020, Statistics Canada reported Tuesday, down from an annualized growth rate of 40.6 percent in the third quarter when the country fully emerged from the near-shutdown last spring.
Despite the better-than-expected result for the quarter as a whole, growth slowed in December with a 0.1 percent increase for the month, which followed a 0.8 percent increase in November.
Looking to January, Statistics Canada said its early estimate was for growth in the economy of 0.5 percent.
CIBC chief economist Avery Shenfeld wrote in a note that the early January figure should set aside fears of an outright downturn in the first quarter of 2021.
The wholesale, manufacturing and construction sectors led the gains, while the retail trade declined at the beginning of the year.
Canada’s economy recorded its worst growth in 2020 as the COVID-19 pandemic devastated the country, leaving businesses shutting down and millions of people quitting.
Statistics Canada said real gross domestic product shrank 5.4 percent, the steepest annual decline since comparable data was first recorded in 1961.
The decline for the year was due to the closures of several major economies in March and April during the first COVID-19 pandemic.
Economic activity slowly and steadily grew between May and November, though renewed lockdowns in some areas and a subdued holiday retail season in December saw the final month of the year buck that trend.
Federal spending has also cushioned the blow. Statistics Canada reported on Monday that government aid has more than made up for losses in salaries and wages, particularly for low-income households.
The different impacts on sectors and the shift in online shopping, among other effects, make GDP an imperfect measure of what the economy went through.
The Liberals have spoken more about employment levels as a key metric of recovery. It’s why experts say Tuesday’s GDP figures likely won’t change federal spending plans the Liberals are set to outline in the coming weeks as part of a budget the government has said would include up to $100 billion in stimulus measures over three years.
The Liberals are reviewing a laundry list of budget ideas to help manage through the rest of the pandemic, and aid in a recovery.
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