Canada is teetering on the edge of a recession.
The country’s GDP has fallen for five straight months, the latest numbers coming in at a 0.2 percent contraction in May. And economists say Canada is about to hit its second-straight quarter of declining GDP, the technical definition of a recession.
Contributing to Canada’s problems include plunging commodities prices, slowing exports and a falling Canadian dollar. The tumble in crude oil, which has fallen more than 15 percent year to date, has hit Canada hard as a commodities-heavy economy.
According to TD Bank’s deputy chief economist, Derek Burleton, investor concerns about the Canadian economy date back to last year, when oil prices first began to fall.
“They’re worried about Canada; they’re still short Canada,” Burleton said. “There’s not a lot of upside to growth.”
An unexpected lag in exports this year has also pulled down GDP. However, Burleton pointed to trade numbers released Wednesday that showed a 6.3 percent jump in May exports, as the beginning of a turnaround.