Canadian Economy Contracts In First Half Of 2015

He is scheduled to speak later Tuesday on the campaign trail.

The second-quarter drop was only half as steep as a consensus of economists had predicted and there was evidence that the decline had finally bottomed out.

The lower value of the loonie – which encourages exports and reduces imports – coupled with a strong USA economy, will help get Canada back to positive growth, Veall explained.

While the price of oil and other natural resources have weakened since June, many expect non-commodity Canadian exports to benefit from a strengthening United States economy, which grew at a 3.7 percent clip in the second quarter.

“This is a problem of execution, and a problem of priorities”, he said at a news conference in Ottawa, as reported by the Canadian Broadcasting Corporation (CBC).

Mr Harper, whose Tories are trailing their rivals in opinion polls ahead of the October 19 election, blamed the overseas turmoil for Canada’s woes, and emphasized an expansion in the economy in June. “But the fact of the matter is over 80 per cent of the Canadian economy has been growing”.

Analysts say the left-of-center opposition New Democrats, led by Tom Mulcair, has a chance to gain power for the first time.

He also reiterated his stay-the-course mantra, insisting the country must ride out external economic and market turbulence whipped up in places like China. The economy is expected to dominate the election debate.

To cushion the impact of cheap oil, Canada’s central bank has cut interest rates twice this year.

Some predictions for Canada’s third quarter forecast economic growth, ranging from 2 to 2.5 percent, according to TD bank, or 1.5 percent, per the Bank of Canada. Since the GDP has been in decline for two straight quarters, that meets the technical definition of a recession. It represented the first time Canada had been in recession since the financial crisis seven years ago. Real GDP fell 0.1 per cent between May and August this year and 0.5 per cent between January and April. Conventional oil and gas extraction remained flat in June. Positive numbers in the June data suggest the expected turnaround could be underway.

This was revealed by Canada’s national statistical agency Statistics Canada on 1 September 2015. It was worse than expectations of 0.0% growth, and it was the fifth consecutive month the economy contracted.

Canada’s economic contraction “looks to be in the rear-view mirror”, BMO Capital Markets chief economist Doug Porter reassured clients in a note. “Jobs grew steadily. The federal government ran a budgetary surplus in the quarter”, he wrote.

“The numbers show we are ready for change in the country”, he said.

As for whether the term recession should apply to the country as a whole, Pastrick said he leaves that to a panel of economists at the C.D. Howe Institute, who assess various factors, including the depth of the downturn, its duration and breadth across multiple industries, and not strictly the rule of thumb regarding two quarters of shrinkage.