The Canadian economy continues to struggle because of the coronavirus lockdown, despite growth in May and June according to Statistics Canada.
On Friday, the agency wrote that while the economy is slowly recovering from the lockdown, Canada’s Gross Domestic Product (GDP) fell by 15% since February.
“Real gross domestic product (GDP) grew 4.5% in May, following two months of unprecedented declines when emergency measures to slow the spread of COVID-19 resulted in widespread shutdowns. In May, provinces and territories started reopening sectors of their economies to varying degrees,” the report claims.
“While May’s gains offset some of the March and April declines, economic activity remained 15% below February’s pre-pandemic level.”
In May, 17 out of Canada’s 20 industrial sectors increased activity, with construction (17.6%) and retail (16.4%) growing significantly as provinces eased coronavirus restrictions.
“General merchandise stores rose 19.8%, reaching a pre-pandemic level of activity. Clothing and clothing accessories (+94.8%), as well as sporting goods, hobby, book and music stores (+98.2%), bounced back as shopping malls and stores began to reopen.”
Statistics Canada’s preliminary estimate suggests GDP will increase by approximately 5% in June.
Despite promising figures for May and June, the agency estimates that the GDP will have decreased by 12% in the second quarter of 2020.
May was another hard month for the energy sector as oil and gas extraction declined by 2.7%, with crude oil production reaching its lowest level since 2016.
Even as the economy rebounded, in June the Trudeau government extended the Canadian Emergency Response Benefit (CERB) two more months, allowing individuals to collect up to $4,000 more than originally announced.
The two-month extension of CERB is estimated to cost around $17.9 billion.
Earlier this month Finance Minister Bill Morneau reported that the federal deficit for this year will be at least $343.2 billion, compared to just $28.1 billion which had been predicted before the pandemic.
