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Canada’s GDP shrank by 11.6% in April — worst monthly drop on record

Coronavirus: Trudeau responds after Canada’s credit rating lowered by U.S. credit rating agency
On Thursday, Fitch Ratings downgraded Canada's credit rating to AA+ from AAA, citing the federal government's move to borrow about a quarter of a trillion dollars to prop the economy up during the pandemic lockdown. Speaking outside of Rideau Cottage in Ottawa on Thursday, Canadian Prime Minister Justin Trudeau said the move only showed that his government was willing to do whatever it takes to protect Canadians.

Statistics Canada says the economy saw its largest monthly drop on record in April as it came to a near standstill due to the coronavirus pandemic, but early indications point to a rebound in May as businesses began to reopen.

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The agency says gross domestic product fell 11.6 per cent in April with non-essential businesses shut for the full month following a 7.5 per cent decline in March.

CANADA'S MONTHLY CHANGE IN GDP

However, Statistics Canada says its initial flash estimate for May points to growth of three per cent, which will be revised and finalized at the end of July.

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Economists on average expected a drop of 13 per cent for April, according to financial markets data firm Refinitiv.

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Manufacturing was down 22.5 per cent in April as many factories either shuttered or greatly reduced capacity in line with public health measures to slow the spread of COVID-19.

The output of the accommodation and food services sector dropped 42.4 per cent in April, as customers replaced eating out with staying in, hitting a sector that saw a 37.1 per cent decline in March.