OTTAWA — The weak Canadian economy would be diagnosed with an official recession today if not for a late Statistics Canada tweak retroactively adding to the economy’s measured health in the second quarter of 2023.
The economy shrank by 1.1 % during the third quarter of 2023, and as originally reported by StatCan, shrank by 0.2 % in the preceding quarter as well. By that measure, (two consecutive quarters of negative or no growth), Canada would currently meet the definition of being in a recession. However, StatCan in November revised the country’s second-quarter gross domestic product (GDP) performance to show 1.4 % growth during the April-through-June period, not a 0.2 % decline. The update coincided with the release of the numbers for the July-through-September period (third quarter).
A StatCan spokesperson explained that this was “not unusual” and in line with the agency’s revision policy that balances timely release of information with accuracy. The GDP numbers are estimates, which do change as “more comprehensive information is added over time to enhance” those estimates.
“In the second quarter of 2023, revisions to GDP were primarily due to updated data for international trade, business capital investment and business inventories, additionally updated data for taxes received by governments,” Annick Irakoze said in an email to Farmers Forum.
Recession or not, the Conference Board of Canada observed in December that higher interest rates are taking the steam out of the Canadian economy. “Households are tapped out from high interest rates and persistent inflation. Consumer spending remained weak in the third quarter, marking two quarters of limited growth,” the organization reported.
Source : Farmersforum