The Canadian economy shrank again in the second quarter, putting the country in recession for the first time since the financial crisis, with a plunge in oil prices spurring companies to chop business investment.

Highlights

• According to Statistics Canada, the economy contracted 0.5 percent in the second quarter after retreating 0.8 percent in the previous three months.
• It is Canada’s second recession in seven years and it is the only Group of Seven nation in economic retreat. The figures are the weakest since the 2008 global financial crisis.
• The data reflects fears about the health of the global economy as more gloomy evidence emerged of a slowdown in China, a main engine of growth worldwide.
• Canada, the world’s fifth-largest oil producer, has been hit particularly hard by the halving of world oil prices from above $100 last year.
• The last time Canada was in recession was in 2008-09, when the U.S. housing market meltdown triggered a global credit crisis.

Must Know about Recession

• Recession is a business cycle contraction. It is a general slowdown in economic activity.
• Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise.
• Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock or the bursting of an economic bubble.
• Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation.

Expected Questions

Name the worlds fifth largest oil Producer.

-Canada

Name the Canadian Prime minister.

-Stephen Harper