Canadian Economy Shrinks the Most in 11 Years
The Canadian economy shrank 2.1 percent on quarter in the first three months of 2020, after expanding 0.1 percent in the previous period. It was the sharpest contraction since Q1 2009, reflecting measures imposed in March to contain the coronavirus pandemic, including non-essential business closures, border shutdowns, and travel restrictions. Household spending dropped at a record 2.3%, amid job losses, income uncertainty, and limited opportunities to spend. Also, government expenditure fell 1 percent, the sharpest drop since Q1 2013, mainly due to school closures and curtailed government administration. In addition, business investment in machinery and equipment decreased for the 4th straight quarter (-3.5%). Exports fell 3% and imports dropped at a softer 2.8%, as major trading partners implemented similar public health measures. Expressed at an annualized rate, real GDP plunged 8.2 percent, the most since Q1 2009, after an upwardly revised 0.6 percent growth in the prior period.
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