Canadian economy notches record growth in third quarter

December 1, 2020

OTTAWA (Reuters) – Canada’s economy grew by a record 40.5% on an annualized basis in the third quarter, rebounding from a historic plunge in the second quarter, as businesses and stores reopened from COVID-19 lockdowns, Statistics Canada said on Tuesday.

But real gross domestic product is expected to gain by a more moderate 0.2% in October, according to a preliminary estimate.

Real GDP rose by 0.8% in September, slightly lower than the 0.9% forecast by analysts. The annualized gain for the third quarter is lower than the 47.6% increase forecast in a Reuters survey of analysts.

“The increase in GDP in the third quarter reflected reopening of the economy, with substantial upturns in housing investment, household spending on durable goods, and exports,” StatsCan said.

Despite the rebound in the third quarter, economic activity remains 5.3% below the fourth quarter of last year, before the pandemic hit, StatsCan said.

On Monday, Canada’s Liberal-led government unveiled a historic C$381.6 billion deficit and pledged up to C$100 billion in stimulus spending to “jumpstart” the recovery, once the virus is under control.

The Canadian dollar was trading 0.3% higher at 1.2959 to the greenback, or 77.17 U.S. cents.

(Reporting by Julie Gordon and Dale Smith, Editing by Steve Scherer, Andrew Heavens and Paul Simao)

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