- Andrew Grantham, CIBC Economics
According to the data released by Statistics Canada, the country's economy shrank in the second quarter, mainly due to the huge wildfires in Alberta.Canadian gross domestic product, the broadest measure of goods and services produced in an economy, equals 1.6% annualized rate for the second quarter to $1.36 trillion. Following numbers represents the worst GDP performance in a more than three-month period since mid-2009, when the country was experiencing the global financial crisis. By the way, expectations were for a 1.5% decrease, according to economists at Royal Bank of Canada. Moreover, the decline follows a revised 2.5% rise during the first quarter. The second quarter, in turn, was widely expected to be weak after fires in northern Alberta which forced to temporarily shut down some energy production in May and forced the evacuation of several communities, including Fort McMurray, which stands for a huge industry production.
In the meantime, the Canadian dollar has lost a quarter of its value versus the US dollar since 2013. Bank of Canada Governor Stephen Poloz announced that current conditions will allow the economy to undergo a structural rebalancing.
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