TORONTO (Reuters) - Canada's third quarter annualized growth soared by a record 40.5%, rebounding from a historic plunge in the second quarter, as businesses and stores reopened from COVID-19 lockdowns, Statistics Canada said on Tuesday.
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DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS AT SCOTIABANK
"There was a big import drag that knocked almost six percentage points off GDP growth ... it reflects positive developments but in GDP accounting it acts as a drag on top line GDP growth."
"The main takeaway is that momentum continued at a modest pace into October, with the preliminary guidance. Obviously, we are going to see that weaken as we get on later in the quarter as restrictions bite."
NATHAN JANZEN, SENIOR ECONOMIST, RBC:
"The quarterly increase in GDP in Q3 as a whole was a little bit smaller than expected earlier on but it's still pretty large."
"We already knew we had a rapid bounce back in economic activity in the third quarter, all the concern now is how much of that can be sustained with the accelerating virus spread and the containment measures."
"The near term momentum entering the fourth quarter looked pretty solid but the concern is what happens in November and we fully expect to see a decline in output in November and the pace of recovery to essentially stall in the 4th quarter.
"The Q3 increase was smaller than what (the Bank of Canada was) assuming in their last forecast update and their bias is to leave rates lower for longer and to stimulate as much as possible, so they're not looking to pull back on stimulus any time soon. Having growth come in a little softer than they assumed almost helps them out with that."
DOUGLAS PORTER, BMO CHIEF ECONOMIST:
"While impressive, the headline is well shy of what was expected. There were some moderate upward revisions to the prior two quarters, which slightly softens the blow. But still, the underlying picture is a touch worse than what was expected. Nothing serious, but probably enough to lead to some downward revisions for the year."
"This is all relatively old news by now given the fact that we've got renewed restrictions and much of the focus is now on the fourth quarter and what happens early next year. On that front it's mildly encouraging that September's gain was still relatively solid and October did manage, at least a first blush, looks like it printed some modest growth. So the economy had a bit of momentum going into the shutdowns."
(Reporting by Jeff Lewis, Moira Warburton and Fergal Smith; Editing by Denny Thomas)