THE CANADIAN ECONOMY has officially slipped into recession, dragged down by rock-bottom global oil prices.
The world’s 11th-largest economy delivered its weakest figures since the global financial crisis hit in 2008, according to government data out today.
Its economy recorded a second-straight quarter in negative territory, posting a 0.5% contraction in the three months to June.
It followed a 0.8% decline for the previous quarter. The back-to-back drops put the country into a technical recession.
Over one-quarter of Canada’s exports are in oil and gas, leaving it one of the countries most exposed to the collapse in global energy prices.
Oil prices dropped to new, six-year lows last year as the wheels showed signs of falling off China’s engine for global growth. The commodity had already been trading at heavy discounts due to a glut of supply and flagging demand.
However there have also been other blemishes on Canada’s financial bill of health.
The property market has been in bubble territory for years, with The Economist recently ranking the country’s house prices the third-most overvalued relative to average incomes in the world – behind only Belgium and Australia.
That has pushed Canadian households further into debt, while lower business investment was separately marked as the main contributor to the latest economic decline.
But the weak GDP figures are yet to lead to any jump in unemployment with the official jobless rate sitting at 6.8% – below the 7%-plus figures seen since the 2008 financial collapse.
The country’s prime minister, Stephen Harper, has insisted that, oil aside, the economy is doing fine.
Meanwhile, an estimated 25,200 people have emigrated from Ireland to Canada since the start of 2010, according to the CSO, while only 7,300 have come back the other way.
- With AFP
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