Quebec’s Gross Domestic Product declined in the third quarter for a second consecutive quarter, signaling that the economy has officially entered recession.
The 0.2% decline in GDP in the third quarter comes after a decline of 0.4% in the previous quarter. At an annualized rate, the decline in the economy reached 0.8%, according to the Institute of Statistics of Quebec.
Two consecutive quarters of decline represent the technical definition of a recession. The Quebec economy has been slowing down since the spring of 2022, recalls Benoit Durocher, economist at Desjardins, and this slowdown has accelerated in recent months. For the first nine months of 2023, Quebec’s real GDP is 0.3% higher than that of the same period of 2022.
However, the fourth quarter could also be negative and confirm the recession in Quebec, especially due to strikes in the public sector, predicts the Desjardins economist.
The Minister of Finance of Quebec, Éric Girard, believes that it is too early to talk about a recession. The slowdown continues, he commented on the social network .
National Bank economists, for their part, believe that Canada’s economic situation is less worrying than it appears at first glance, despite the two consecutive quarters of decline. “To get a better idea of the robustness of the province’s economy, it is better to look at private domestic demand, which rebounded by an annualized 2.6% during the quarter, compared to a decline of 0.4 % for all of Canada,” point out Matthieu Arseneau and Daren King.
The Quebec economy was weighed down by international trade and a drop in investments, while domestic demand remained solid.
The Canadian economy also declined in the third quarter and its growth is 1.5% after the first nine months of the year compared to the same period last year.
In Quebec, the main sectors contributing to the decline in real GDP in the third quarter are public services, construction, the health care and social assistance sector as well as the professional, scientific and technical services sector. In contrast, retail trade, public administration, real estate services and rental and leasing services as well as wholesale trade recorded increases in their level of activity, according to the Institute of Statistics of Quebec.