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Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is the total monetary value of goods and services produced within an economy during a specific period of time. It is used as a measure of the size and growth of an economy.

Highlights

  • Canadian real GDP declined by 5.4 per cent in 2020, the steepest annual decline on record.
  • The sharp decline in Canadian real GDP in the first two quarters of 2020 accounted for the annual decline recorded in 2020.
  • Measured on a quarterly basis, Canadian real Gross Domestic Product (GDP) rebounded from declines in the first two quarters of the year to register two consecutive quarterly growth in Q3 and Q4 2020.
  • In Q4, growth was pervasive, occurring across both the goods producing and service sectors.
  • An average of private sector forecasts suggest that Canadian real GDP will grow by approximately 5.3 per cent in 2021.

Annual Canadian real GDP

Canadian real GDP recorded an annual decline of 5.4 per cent in 2020 representing the steepest annual GDP decline since 1961 when the data first became available.

The significant drop  in GDP in 2020 was the result of a 4.9 per cent contraction in the GDP of the service sector, which was the largest decline on record, and a 6.2 per cent decline in that of the goods-producing sector, representing the steepest decline since 2009.

Accommodation & food services, and transportation & warehousing sub-sectors led the decline in services, while manufacturing led the decline in the goods-producing sector

The decline in Canadian real GDP was not uniformed throughout the year. There were sharp declines in Q1 and Q2 2020. Canadian real GDP rebounded in Q3 and Q4 2020 as COVID-19 measures eased.

GDP is expected to continue to recover throughout 2021 to register an annual growth of 5.3 per cent.

Despite the rebound expected in GDP in 2021, the Canadian economy is not expected to return to its pre-pandemic level until 2022 at the earliest.

Quarterly Gross Domestic Product

In Q4 2020, Canadian real GDP registered its second consecutive quarterly increase, up by 2.3 per cent.

Annualized, this represented a growth of 9.6 per cent in Q4 2020, following a growth of 40.5 per cent in the preceding quarter.

There was growth in GDP of both the goods producing (8.8 per cent) and service (9.3 per cent) sectors.

There was growth in the GDP of both the goods producing (2.4 per cent) and service (2.1 per cent) sectors.