GDP Shrinks to Worst Level Since '09

Not that this should have come as a surprise in light of the coronavirus pandemic, but Canada's economy shrank at an 8.2% annual pace in the first three months of 2020, as an already weak economy in January and February was walloped by the virus in March.

Statistics Canada reported Friday that the slowdown in gross domestic product was the sharpest quarterly drop since the financial crisis of 2009, as measures to contain the pandemic such as school and business closures, border shutdowns and travel restrictions brought economic activity grinding to a halt.

While bleak, the 8% decline was better than the 10% contraction that economists had been expecting for the period. For comparison purposes, the U.S. economy shrank by 5% over the same time frame.

While the worwst of the contraction came in March when the pandemic hit, January and February's numbers weren't overly strong to begin with due to pre-existing drags such as rail blockades across the country, and a teacher strike in Ontario in February.

In absolute terms, Canada's gross domestic product was 2.1% smaller over the three months than it was at the end of 2019. But much of that came in March alone, as GDP declined by 7.2% during the month. That makes March 2020 the worst month for Canada's economy since record-keeping began in 1961.