Shomporko Desk:-OTTAWA – Statistics Canada says the economy developed by 4.5 per cent in May as businesses started to reopen after severe lockdowns of March and April.
The average economist estimate was for a 3.5 per cent increase in gross domestic product for May, according to financial data firm Refinitiv.
The national data agency says rebounds in May were seen over different ventures with the facilitating of COVID-19 limitations, including the retail exchange that enrolled a 16.4 per cent knock to check its biggest month to month increment since equivalent readings started in 1961.
Motor vehicle and car sales contributed the most to retail growth. Statistics Canada says the sector would have grown by 11.4 per cent had they been excluded from calculations.
In a preliminary estimate for June, the agency says the economy continued to pick up steam, with a five-per-cent increase for the month.
Despite the two months of growth after two months of negative readings, Statistics Canada’s preliminary estimate is that economic output contracted by 12 per cent in the second quarter compared to the first three months of 2020.
The June and second-quarter figures will be finalized late next month.
CIBC senior economist Royce Mendes says in a note that a 12-per-cent drop in the second quarter would be the largest decline ever by a long shot, even if such a decline was expected.
The Bank of Canada’s most recent economic outlook expected the second quarter of 2020 to be worse than the first, estimating a three-month drop in GDP of 14.6 per cent.
Overall, the central bank expected an economic contraction of 7.8 per cent this year, warning that after an immediate turnaround as restrictions eased, recovery would be long and bumpy with some businesses and jobs not surviving the downturn.
Statistics Canada says economic activity still remained 15 per cent below the pre-pandemic level despite the gains over May as business activity was slowly allowed to resume.
Photo credit: THE CANADIAN PRESS/Jonathan Hayward
News source: The Canadian Press