Statistics Canada’s official data showed that Canada’s economy shrank by 5.4% in 2020. The last year has been the country’s worst year to date. Canada experienced a record-setting plunge during 2020. The shutdown of significant parts of the economy in March and April has caused the drop. However, since summer, economic activity has been growing steadily. According to the data agency, Canada’s gross domestic product grew by 2.3% during the last three months of 2020.
Canada’s Economy in 2020
According to Statistics Canada, the annual economic growth rate was 9.6 % in the first quarter of 2020. The rate was higher than what experts were expecting. On average, economists were expecting 7.5 % growth. Statistics Canada said that December’s total economic activity was about 3 % less than the pre-pandemic level in February 2020.
Statistics Canada estimates growth in the economy of 0.5% in January. Addressing clients, an economist at the Bank of Montreal, Douglas Porter, wrote: “solid advance landed right in the heart of the second wave restrictions and is in spite of a heavy drop in retail sales in the month.”
According to Douglas, a significant rebound in sector activity, housing market, and manufacturing strength, wholesale trade could account for reasons the economy did better in January.
CIBC chief economist Avery Shenfeld said that the early January figure should set aside fears of an outright downturn in the first quarter.
Many Canadian economists think the economy will grow further. Sri Thanabalasingam, an economist in TD Bank, expects economic growth to continue in March. The reasons are provinces gradually easing restrictions, the vaccination program is quickened, and coronavirus cases are going down. He believes that the near-term future seems promising.
Canada’s economy showed great progress in the final two months of 2020, even amid a new wave of Covid-19 restrictions.