Canada's GDP surges 6.5% in June, sees record Q2 plunge

Canada's real GDP surged by a record 6.5% in June, as the economy continued to claw back from steep declines in March and April, though economic activity still remains below pre-pandemic levels, Statistics Canada said on Friday. Second quarter annualized growth meanwhile sank by a record 38.7%, by far its sharpest decline on record, as business were shuttered during the period to slow the spread of COVID-19.

Canada's real GDP surged by a record 6.5% in June, as the economy continued to claw back from steep declines in March and April, though economic activity still remains below pre-pandemic levels, Statistics Canada said on Friday.

Second quarter annualized growth meanwhile sank by a record 38.7%, by far its sharpest decline on record, as business were shuttered during the period to slow the spread of COVID-19. July real GDP meanwhile is expected to be 3.0%, Statistics Canada said in a preliminary estimate. The June numbers were above analyst expectations of a rise of 5.6%, while the Q2 plunge was slightly less sharp than an expected decline of 39.6%.

"For now it's definitely a V shaped (recovery)," said Derek Holt, head of Capital Markets Economics at Scotiabank. "Any tendency to tamp that down should be checked by the fact that few people expected this magnitude of a rebound to begin with." The goods-producing sector posted a 7.5% increase in June, while the service-producing sector grew by 6.1%. Nineteen out of the 20 industrial sectors grew in June, StatsCan said.

The Canadian dollar pared gains after the data, trading at 1.3072 to the greenback, or 76.50 U.S. cents, though still up 0.3% on the day.