Canadian economy shrank 3.4% in fourth quarter
by investor on 02/03/09 at 1:15 pm
Canada’s economy shrank at an annual pace of 3.4% in the fourth quarter of 2008, Statistic Canada reported Monday, as the global slowdown pulled the country into its worst downturn since the early 1990s.
The federal agency also said gross domestic product fell 1% in December from the previous month.
The contraction between October and December was the first quarterly decline since Canada’s last recession in 1991-92.
Meanwhile, the agency revised its third-quarter GDP growth to 0.9% from 1.3%. For all of 2008, the economy grew 0.5% from 2.7% the previous year.
“On balance, this report could have been worse, but it does show the fundamental weakness of the Canadian economy at this point in the business cycle,” said Charmaine Buskas, senior economics strategist at TD Securities.
“And given the headwinds against the Canadian economy at this time, the near term does not look pretty.”
Statistics Canada said exports fell 4.7% in the fourth quarter — the sixth straight drop and the longest slide in more than 60 years of government records. Auto products accounted for nearly half of the decline.
Imports were down 6.4% in the quarter, with auto products falling 16%. “Declines were registered for both goods and services imports, as domestic demand faltered and prices for imported goods and services rose,” the agency said.
Personal spending fell 0.8% — the first decline since the fourth quarter of 1995, it said.
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