Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is the total monetary value of goods and services produced within an economy during a specific period of time. It is used as a measure of the size and growth of an economy.
- In Q2 2020, Canada recorded the steepest decline in quarterly GDP since Statistics Canada data became available in 1961.
- This is the second consecutive decline in GDP in Q2 2020 and confirmed that the Canadian economy entered a recession in the first quarter of 2020.
- As some COVID-19 restriction measures have been lifted across Canada, third-quarter GDP is expected to increase.
Quarterly and Annualized Real GDP
Although Canadian real GDP increased in May (4.8 per cent) and June (6.5 per cent), the historic fall in April (-11.7 per cent) led to a quarterly decline of 11.5 per cent in GDP in Q2 2020.
Annualized , Canadian real GDP fell by 38.7 per cent in Q2 2020, the steepest decline in 59 years, and was consistent with private sector forecasts.
This was the second consecutive quarterly decline in Canadian GDP and confirmed that the economy entered a recession in the first quarter of 2020.
The GDP of both the goods producing (-13.2 per cent) and service (-10.8 per cent )sectors declined, contributing to the overall decline in quarterly GDP.
All sub-sectors registered lower quarterly GDP, led by arts, entertainment and recreation (-53.5 per cent), accommodation and food services (-50.0 per cent) and transportation and warehousing (-27.1 per cent).
Canadian Real Gross Domestic Product Forecast
Based on the nowcast by Statistics Canada, Canadian monthly GDP is expected to increase by approximately 3.0 per cent in July 2020, continuing the economic rebound.
Based on private sector forecast, monthly growth is expected to continue throughout the third quarter of 2020 contributing to an annualized growth of approximately 30.0 per cent in Q3 2020.
Private sector average GDP forecast also suggests that real Canadian GDP is likely to show the following changes in upcoming years:
- 2020: -6.7 per cent; and
- 2021: 5.6 per cent