Statistics Canada reveals the wide-ranging impact of long-running pandemic pressures
Canada’s gross domestic product declined less than anticipated during the late spring, with surprising economic strength propping up households’ purchasing power, according to Statistics Canada.
The latest data from the agency showed that GDP shrank by approximately 0.3% in both April and May. Despite this drop bringing economic output down to roughly 98.5% of pre-pandemic levels per Bloomberg calculations, the readings actually defied prior forecasts of a more pronounced 0.8% decline in April.
Read more: Improved purchasing power could boost recovery prospects
Observers are confident that this semblance of strength will last through the remainder of the year.
“June is almost assuredly coming in positive as a result of the reopenings,” Jimmy Jean of Desjardins Securities told BNN Bloomberg, citing the gradual reopening that saw most restaurants and other services restart operations last month.
Should vaccinations remain steady and infections remain controlled, the Canadian economy might return to its pre-pandemic performance levels during the third quarter, Bloomberg reported.
Earlier this week, Benjamin Tal of the Canadian Imperial Bank of Commerce said that much of this revitalized activity would stem from substantial spending by households and businesses, which were estimated to have saved as much as $100 billion and $130 billion, respectively, during the pandemic year.
“What we are seeing is a situation in which, as a society, we are sitting on a mountain of cash,” Tal told the Financial Post in an interview. “Most of this money, when it’s going to be spent … will be in services. Exactly where the pain is, and exactly where you need the jobs. That’s why I see economic recovery being very strong in the second half of the year, because this money will be targeted exactly where it should be going.”
