In 2020, Canada posted its worst economic showing on record as the global COVID-19 pandemic led to growth in unemployment and business shut downs.
According to Statistics Canada, the real gross domestic product (real GDP) declined by 5.4 per cent in 2020, representing one of the steepest annual declines since the data was first recorded in 1961.
The drop in real GDP was largely due to the pandemic-related business shutdowns in major areas of the Canadian economy in March and April when the first wave of the COVID-19 pandemic spread across the country.
Economic activity in Canada has slowly and steadily grown between May and November, despite the renewed lockdowns in COVID-19 hotspot areas and a subdued holiday retail season in December.
The economy grew at an annualized rate of 9.6 per cent in the last three months of 2020 reported Statistics Canada, down from an annualized growth rate of 40.6 per cent in the third quarter of 2020 when the country fully emerged from the near-shutdown last spring.
The Federal Government’s spending has also played an important part in cushioning the blow of an economic recession as government aid programs made up for the losses in salaries and wages, particularly for low-income households.
Bank of Canada’s governor, Tiff Macklem, said he is looking forward to an economic rebound beginning this year after recent GDP figures showed the economy started to recover in the last three months of 2020, before the most recent lockdown.
Despite beginning the year “in a deeper hole,” Macklem has forecast a strong revival in 2021 that would continue into next year, bolstered by the COVID-19 vaccine and low-interest rates.
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