Statistics Canada has reported that the economy grew 4.6% in 2021, compared with a decline of 5.2% in 2020, the first year of the COVID-19 pandemic. Growth in the fourth quarter came in at an annualized rate of 6.7%.

Statistics Canada said the largest contributor to economic growth last year was household spending and residential construction as new home construction, resales and renovations increased at near-record levels. Output was flat at the end of the year as Statistics Canada said real gross domestic product was essentially unchanged in December. That left the Canadian economy 0.4% above pre-pandemic levels recorded in February 2020.

The agency also said in an early estimate that the Canadian economy grew by 0.2%  in January. The January figure came as a bit of surprise for economists who expected a pullback in the month amid the Omicron wave that led to a loss of 200,000 jobs in the month.

Royce Mendes, managing director and head of macro strategy at Desjardins, said the economy likely built on that momentum in February as the country turned a corner on the latest wave of the pandemic, which allowed for businesses to reopen across the country.

Russia’s invasion of Ukraine adds uncertainty to the global economic outlook, making it harder for central bankers to make monetary policy decisions. “Canada’s economic engine was going almost full throttle,” Arlene Kish, director of Canadian economics at S&P Global Inc.. “Geopolitical events are impacting energy prices, adding to already strong inflationary pressures, and may require the Bank of Canada to act more swiftly during the initial monetary policy tightening cycle.”

Source: Globe and Mail
Source: The Star
Source: Financial Post