Canada: GDP tumbled, but encouraging signs are emerging

The flag of Canada flying above the city of Toronto. Jeff Vinnick via Gettyimages.fr

Text by: RFI Follow

2 min

Like the vast majority of countries, Canada is bearing the brunt of the impact of the coronavirus pandemic and the lockdown on its economy. According to Statistics Canada, the gross domestic product (GDP) fell 11.9% in the second quarter. Businesses exported less and sold less in early spring. On the other hand, the situation seems to be improving faster than expected.

Publicity

Read more

With our correspondent in Quebec, Pascale Guéricolas

Never has Statistics Canada recorded such a catastrophic second quarter for the economy since 1961. Gross domestic product (GDP) fell 11.9% in April, May and June.

But the Canadian economy can also be seen with a little more optimism: the incomes available to Canadians during this period increased by 10%, and savings by 28%. Why ? Essentially because the Canadian government has put in place a real safety net to compensate for the loss of corporate income.

► Read also: Political crisis in Canada: surprise resignation of the Minister of Finance

The economy is expected to recover quickly

Emergency benefit, wage subsidies, family allowances: the State has not spared to support the citizens. In this way, Canadians were able to save more, mainly because the opportunities to spend were conspicuous by their absence.

This government choice comes at a price, however: the deficit now stands at more than 280 billion euros, or 20% of GDP. Canadian strategists still remain confident and believe the economy should recover quickly. Already, the statistics are encouraging for June. On the other hand, the strict containment rules have made it possible to contain the epidemic, which should encourage companies to invest again.

Newsletter Receive all the international news directly in your mailbox

I subscribe

Follow all the international news by downloading the RFI application

google-play-badge_FR

  • Canada
  • Economy
  • Coronavirus
  • Economic crisis

On the same subject

Canadian Conservatives elected their new leader, Erin O'Toole

Coronavirus in Canada: cascading resignations among Quebec nurses