The Canadian economy returned to life in July and August, expanding by 0.2 per cent after three months of contraction, Statistics Canada said.
Alicia Macdonald, head of economic advisory at Deloitte, said the rebound is a huge relief after a difficult spring.
“It’s an indication that after a rough few months, the economy is starting to find its footing,” said Macdonald. “The fact that we started the third quarter with some positive growth likely implies Canada will be capable of avoiding a technical recession.
However, Macdonald added that trade and business investment remain under threat. “We do expect the trade sector to pick up over the later half of this year and really contribute to growth, but it is from a very low base,” she said.
Macdonald also stated that domestic spending will be restrained in the presence of reduced population growth and weaker labour markets, though she stated she expects the Bank of Canada to keep reducing interest rates this autumn.
