Canada’s GDP grew 3% in July as other sectors reopened

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The Canadian economy continued to recover in July after the first wave of COVID-19, with the country’s gross domestic product increasing 3%.Statistics Canada reported on Wednesday that all 20 sectors of the economy rose as businesses continued to reopen and attempt to return to some sense of normal after the March and April lockdowns.

Production in agriculture, utilities, finance and insurance, as well as real estate rental and leasing companies, has returned to where it was before the pandemic struck. Retail businesses achieved the same feat the month before, in June. But despite July’s growth, all other business types have yet to return to their previous highs.

The strongest expansions of the month were in hotels / restaurants (+ 20.1) and arts / entertainment / leisure (+ 14%), but these numbers are very low and still face the biggest drop from the levels from last year. Bank of Montreal economist Benjamin Reitzes spoke about the numbers.

Overall, GDP was 6% below February’s level, Statistics Canada said.

GDP July (Scott Galley / CBC)

The 3% gain was what economists expected. This was about half of the 6.5% increase seen in June.

While StatsCan is still calculating the final numbers, its first projections for August show an expansion of just 1%, suggesting that Canada’s economic recovery is faltering as it appears a second wave of the virus is hitting parts of the country. country. .

TD Bank economist Sri Thanabalasingam said, based on the July figures, these fears are well founded.

“A slowdown and uneven growth indicate that the Canadian economy is moving from the rebound phase to a more difficult stage of the recovery,” he said.

“Even without restrictions, consumers and businesses can limit their spending in response to the increasing number of cases. The second wave is now upon us, and the course of the recovery will depend on our success in containing it. “

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