(Quebec) Quebec should “normally” avoid recession despite the 1.9% decline in GDP in the second quarter, estimates Finance Minister Eric Girard.
This decline is more pronounced than the Canadian average (-0.2%).
According to the government’s chief financier Legault, “normally, the third quarter should be positive and we will not have two consecutive negative quarters, which is the traditional definition of the start of a recession.”
He observes that the third quarter of the American economy, where the data is more up to date, is “extremely strong” and will allow Quebec – like all of Canada – to “do well”.
“We do not anticipate a negative third quarter in Quebec, and we remain moderately positive,” he maintained during a press scrum in parliament on Wednesday.
He maintains the forecast included in his March budget for economic growth, that is to say an increase in GDP of 0.6%. “We are exactly where we thought,” he pleaded.
He recalls that the first quarter was “pretty strong”, with growth of 1.4%.
On the second-quarter decline, he argued: “I don’t want to pretend it’s good news. It wasn’t a good quarter, but when you consider that the fourth quarter of 2022 and the first quarter were strong, and it’s strong in the United States in the third, we’re correct. »
If the second quarter ended up in the red, it was partly due to “the impact of forest fires on mining”, according to him.
During question period at the Salon Bleu, the Liberals expressed their concerns about the performance of the Quebec economy. Interim leader Marc Tanguay accused the government of having “jovialistic” forecasts compared to private sector economists. With the second quarter figures, “reality has hit the government once again. […]. The CAQ has made a mistake once again.”
“The Prime Minister rightly accuses Québec Solidaire of advocating degrowth. He realizes it every week, the decline. We are the champions in the fall in GDP,” he said.
François Legault responded by saying that “when we look at economic growth per capita over the past five years, we have been better in Quebec than in Ontario or the rest of Canada.” “Let’s be proud of that and then stop talking nonsense,” he added.
“We must not be alarmist,” added Eric Girard. “We will not have a prolonged contraction” of the economy, “the contraction will be limited to the second quarter”.
His opinion is not necessarily shared in the private sector. “Although it is still early to say, this could be the start of a period of economic contraction which is likely to last until the beginning of 2024, according to our scenario,” he told La Presse, Tuesday, Desjardins economist Hélène Bégin.