‘The Canadian economy hit a rough patch in April and May, but the journey was not as bumpy as expected’
Canada’s economy contracted less than expected during the third wave of COVID-19, proving surprisingly resilient despite the lockdowns.
Gross domestic product shrank 0.3 percent in April and by a similar amount in May, according to Statistics Canada estimates released Wednesday. Economists had anticipated a 0.8 percent drop in April.
Despite the contraction, this is good news suggesting that the economy was able to avoid the worst effects of the restrictions that included massive closures in the retail sector in the main provinces during those two months.
The report may stoke expectations of a strong rally from here, with preliminary evidence pointing to robust activity in June. Economists predict the country will rebound to pre-pandemic production levels in the third quarter, barring further delays in reopening.
“The Canadian economy hit a rough patch in April and May, but the journey was not as bumpy as expected,” Royce Mendes, an economist at the Canadian Imperial Bank of Commerce, said in a report to investors.