Statistics Canada reported on Friday that the Canadian economy has grown as real gross domestic product rose 1.2 percent in August.
It grew for the fourth month in a row after falling sharply to record lows in March and April between epidemic lockdowns. The August figure was down from the 3.1 per cent expansion seen in July.
The August number is still ahead of what the forecasts forecast. According to financial data firm Refinitive, economists expect 0.9 percent growth this month.
Despite the recent growth string, overall economic activity was less than five per cent below the pre-February pandemic level, Statistics Canada said.
September growth forecast
Preliminary data from Statistics Canada indicates that real GDP grew by 0.7 per cent in September, with growth in the manufacturing and government sectors, as well as mining, quarrying and oil and gas extraction.
“This advanced estimate represents a growth of about 10 percent in real GDP in the third quarter of 2020,” Statistics Canada said. In the second quarter, the country’s GDP fell 11.5 percent in the three-month period between April and June.
Royce Mendis, a senior economist at CIBC Capital Markets, said the revival of coronavirus cases could lower the Bank of Canada’s “warmer” estimate for a quarterly adjusted fourth-quarter GDP growth rate of one per cent if economic contracts are uming in October and November.
“The economy appears to have slowed more than expected in the fourth quarter, and for the most part now the result indicates that GDP has not advanced during this period,” Mendis said in a comment.
BMO chief economist Doug Porter said the way forward through the second wave and renewed sanctions is deeper, so growth will cool significantly in the fourth quarter.
“However, with continued massive financial support, fewer sanctions than ever before, and, as consumers and businesses have learned to operate in this new environment, we suspect last year’s setbacks to be much easier,” Porter said. “In fact, overall we expect modest growth [the fourth quarter]. “