Canadian economy posted record drop in Q2 due to pandemic

Statistics Canada says the economy posted its steepest decline on record in the second quarter as the COVID-19 pandemic forced the closure of non-essential businesses and slowed the economy to a crawl.

The agency says real gross domestic product contracted at an annualized rate of 38.7 per cent for the three-month period.

Economists had expected a contraction in the quarter at an annualized rate of 39.6 per cent, according to financial markets data firm Refinitiv.

Almost every single component of the economy that works into calculating GDP was at its lowest point over April, May and June driven largely by lockdowns in April.

Economic output rebounded in May by 4.8 per cent, and the agency says June posted an increase of 6.5 per cent.

The agency's preliminary estimate for July indicates a three-per-cent increase in real GDP.