News
- Canada's economy grew
- 8/31/2009
Canada's economy grew for the first time in 11 months in June, providing a glimmer of hope at the end of a period that still marked the country's third consecutive quarter of economic contraction.
Gross domestic product increased 0.1 per cent in June from May, led by drillers of oil and gas, wholesalers and real estate agents , Statistics Canada reported Monday.
Over the second quarter as a whole, GDP shrank at an annual rate of 3.4 per cent, compared with a contraction of 6.1 per cent in the first three months of the year, as exporters continued to struggle to find markets amid the deepest global downturn since the Second World War.
Statscan's latest GDP figures reinforce the Bank of Canada's outlook. The central bank, led by Governor Mark Carney, predicted last month that Canada's first recession since 1992 would end this quarter and begin a long, slow climb out of the hole created by the financial crisis.
The Bank of Canada predicted that GDP would contract at an annual rate of 3.5 per cent in the second quarter and expand at a rate of 1.3 per cent in the third quarter. Mr. Carney said it will be at least a year before the economy is expanding at a pace that would cause him to worry about inflation because so much production capacity has been idled by the recession.
The central bank doesn't forecast monthly GDP, which Statscan calculates slightly differently than it does the three-month figure. The two numbers are close enough that economists use the monthly data as a guide to the more commonly used quarterly readings.
Statscan's calculation of a 6.1-per-cent rate of contraction in the first quarter was revised from an original estimate of 5.4 per cent.
“The Canadian recession appears to have been deeper than initially thought, but June's monthly real GDP number does suggest that the recession did finally end in June,” Meny Grauman, an economist at CIBC World Markets in Toronto, observed in a note to clients.from the Globe and Mail