OTTAWA – Statistics Canada says the economy grew at a record annualized pace of 40.5 per cent in the third quarter as businesses came out of COVID-19 lockdowns.
The previous record for quarterly growth in real gross domestic product was 13.2 per cent in the first quarter 1965, the agency says.
As historic as the rebound was, it fell short of expectations.
Financial data firm Refinitiv says the average economist estimate was for an annualized growth rate of 47.6 per cent for the quarter.
The rebound over July, August and September was a sharp turnaround from the preceding three-month stretch which saw a record drop.
Driving the bounce-back were the further rolling back of public health restrictions that allowed businesses to reopen.
Statistics Canada also says there was a substantial increase in the housing market owing to low interest rates and household spending on goods like cars.
Despite the overall increase, the national statistics office says real gross domestic product still remains shy of where it was before the pandemic.
The third quarter ended with the fifth consecutive monthly increase in real GDP after the steepest monthly drops on record in March and April when widespread lockdowns were instituted to slow the spread of COVID-19.
September saw a 0.8 per cent increase in real GDP, Statistics Canada says, a slight slowing from the 0.9 per cent recorded in August.
The agency also provided a preliminary estimate for October’s figures, saying early indicators point to a 0.2 per cent increase in the month. The figure will be finalized at the end of this month.
“The fourth quarter of 2020 is still beginning with some growth, though less than we had anticipated,” CIBC senior economist Royce Mendes wrote in a note.
“Looking ahead, the economy faces a December with harsh restrictions that will likely see another contraction in economic activity.”
This report by The Canadian Press was first published Dec. 1, 2020.
Economy Spiraling, Vexed Central Banks, Rich Get Richer: Eco Day – Bloomberg
Welcome to Monday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help you start the week.
- A top economic adviser to President-elect Joe Biden warned the U.S. economy is “spiraling downward” and called for a swift response
- Resurgent coronavirus outbreaks will vex central bankers on five continents this week as they weigh the threat of more damage to growth against a hope that mass vaccinations will reopen economies
- Some Americans have become, by some measures, richer during the pandemic than ever before
- Joe Biden ascends to the presidency on Wednesday with an inaugural speech outlining how he’ll tackle the health and economic crises he inherits while attempting to knit the country back together after riots. Here’s why Biden’s stimulus hopes might actually depend on ‘reconciliation.’ Meantime, U.S economist Nouriel Roubini fears Biden’s presidency will be marked by unrest and cyber attacks
- Goldman Sachs economists raised their growth forecasts for the U.S. this year and beyond after Biden unveiled a sweeping revival plan
- Hong Kong’s unemployment rate for the three months through December is likely to exceed the highest level in 16 years
- Robert Hormats, ex-vice chairman of Goldman Sachs International and adviser to five U.S. administrations, predicted tariffs on China will remain under Biden during the “What Goes Up” podcast
- A surge in coronavirus cases in Japan has dealt a blow to Prime Minister Yoshihide Suga’s once strong public support, raising the risk he gets replaced ahead of an election due by October
- Germany’s dominant party voted for continuity by electing Armin Laschet as leader, opting for the candidate who most resembles outgoing chancellor Angela Merkel in policy and style
- The EU has set out plans to strengthen the international role of the euro, as its seeks to erode the dominance on the dollar and lessen risks like U.S. sanctions. French Foreign Minister Jean-Yves Le Drian is calling for a moratorium on tariffs between the EU and the U.S. to allow time for the “poisonous” issue to be resolved
- Italy expects debt to rise more than expected this year, as it gets ready to boost fiscal stimulus to support a battered economy
- The Dawei Special Economic Zone, Myanmar’s largest industrial project backed by Thailand, is headed for further delay and possible litigation following sudden termination of development contracts
- The world’s biggest shipping company demanded a more effective military response to surging pirate attacks off West Africa’s coast
- More than three months a hundred Thai resorts reopened to extended-stay travelers in an attempt to revive a battered economy, foreign arrivals have failed to meet even rock-bottom expectations
Israel economy likely to grow 4.6% in 2021, says finance ministry – The Journal Pioneer
By Steven Scheer
JERUSALEM (Reuters) – Israel’s economy is likely to grow by 4.6% this year, the Finance Ministry said on Sunday in a forecast reliant on continuation of rapid COVID-19 inoculations and a drop in the infection rate.
In a lower probability scenario in which the health environment deteriorates because of new virus mutations or vaccinations taking longer than expected, forcing further lockdowns, the economy would grow by only 1.9%, the ministry said, adding that its projection for 2020 is a 3.3% contraction.
Israel has been a world leader in vaccinating its population against the coronavirus.
“The economy will recover at the rate that had characterized the sub-prime (2008 financial) crisis,” the ministry said of its main scenario, assuming “vaccination of the population in the first half of 2021 when, in this period, there are still limited health restrictions”.
The Bank of Israel has estimated a contraction of 3.7% for 2020 and growth of 6.3% in 2021 if the rapid vaccination pace is maintained. That would fall to 3.5% growth in a slow-inoculation scenario.
According to the ministry, Israel’s economy fared relatively well in 2020 and outperformed an OECD average of a 5.5% contraction. It cited minor damage to exports thanks to high-tech exports.
It noted, however, that unemployment remained high at 15.4% in 2020 and is expected to fall to 8.6% in 2021 in its base scenario and to 11.6% in a more pessimistic projection, with a decline in the average wage in either case.
Separately, in a third estimate, the Central Bureau of Statistics said the economy surged 39.7% in the third quarter of 2020 on an annual basis compared with the second quarter, reflecting an economy that was mostly open during the summer between lockdowns. The economy had contracted by 29.9% in the second quarter.
Another slight contraction is expected in the fourth quarter owing to lockdowns, while exporters have said they are also suffering because of an appreciation of the shekel. The currency last week reached 3.11 against the dollar, its strongest in 24 years.
The Bank of Israel, which has been reluctant to lower short-term interest rates beyond its current 0.1% rate on a view that rapid vaccinations will boost the economy, responded on Thursday with a pledge to buy $30 billion of foreign currency in 2021, up from $21 billion in 2020.
The shekel has since weakened to 3.27 against the dollar.
Growth in the July-September period was driven by sharp gains in exports (59.7%), private spending (42.3%) and investment in fixed assets (17.2%).
(Reporting by Steven Scheer; Editing by David Goodman)
Economy Spiraling With Urgent Need for Action, Biden Aide Warns – Bloomberg
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- Economy Spiraling With Urgent Need for Action, Biden Aide Warns Bloomberg
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