The Quebec economy is technically in recession while it contracted for a second consecutive quarter, according to data from the Institut de la tourisme du Québec (ISQ).
Quebec’s real gross domestic product (GDP) fell by 0.2% in the third quarter after decreasing by 0.4% in the previous quarter. On an annualized basis, the decline in the third quarter was 0.8%.
The Quebec economy thus went through a recession for the period from April to September, according to data from the ISQ.
In Quebec, the Minister of Finance, Eric Girard, argues that the Quebec economy is not in recession. “It is nevertheless too early to declare that Quebec is in recession since the drop in activity is not widespread,” he wrote on the X platform.
He adds that the job market is doing well. “We will continue to monitor the situation closely in the coming months and are aware that the context remains difficult for many Quebecers. »
Even if the Quebec economy is technically in recession, “the situation is perhaps less worrying than it seems at first glance,” qualify economists Matthieu Arseneau and Daren King of the National Bank in a note.
They point out that the decline in GDP is attributable to a drop in investment in inventories and international trade. “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. »
The strike by state employees, however, risks leading to another quarter of economic contraction, the two economists anticipate. “It is an open secret that the public sector strike will mean another quarter of economic contraction. This comes on top of an already faltering economy, whose recent slump has already caused a 1.2 percentage point increase in the unemployment rate since May. »
However, they point out that the unemployment rate has been below the Canadian average “for quite a while”. “As elsewhere, the year 2024 promises to be strewn with pitfalls, but we continue to believe that Quebec’s GDP could prove resilient compared to the rest of the country, particularly due to the lower level of household debt . »
The two economists emphasize that the savings rate increased from 12.1% to 12.6% from the second to the third quarter, “which remains much higher than the 5.1% recorded at the national level”.
In Canada, real GDP fell by 0.3% in the third quarter, after increasing by 0.3% in the previous quarter, according to data released on November 30 by Statistics Canada.