The economy of the province of Quebec has technically entered a recession phase, as it recorded a second consecutive quarterly contraction, according to data from the Institut de la statistique du Québec (ISQ).

The real gross domestic product of the second largest of Canada’s ten provinces by population (8.95 million people) and economy size decreased by 0.2% in the third quarter of this year following a 0.4% decline in the second quarter.

On an annual basis, the contraction rate in the third quarter reached 0.8%.

Thus, Quebec's economy experienced a recession during the period from April to September, according to data from the Quebec government’s Institut de la statistique du Québec.

Meanwhile, Quebec's Minister of Finance, Éric Girard, said that the province’s economy is not in recession.

“It is premature to declare that Quebec is in recession because the decline in (economic) activity is not general,” Girard wrote on the "X" platform (formerly "Twitter").

The Quebec finance minister added that the labor market is in good condition.

“We will continue to closely monitor the situation in the coming months and we recognize that the context remains difficult for many Quebec residents,” said Girard.

Even if Quebec’s economy is technically in recession, “the situation is probably less worrying than it appears at first glance,” said economists Mathieu Arseneault and Darren King from Banque Nationale, one of Canada’s major banks, in a memo.

The two experts also noted that the decline in GDP is attributed to reduced investments in international trade.

“To get a better idea of the strength of the province’s economy, it is better to look at private domestic demand which recovered at an annual rate of 2.6% during the quarter, compared to a 0.4% decline in all of Canada,” explained Arseneault and King.

However, the ongoing strike involving a large part of Quebec’s public sector employees may lead to another quarterly contraction, according to the two experts.

Nevertheless, they pointed out that Quebec’s unemployment rate has been lower than the Canadian average “for a long time.”

“As is the case in other places, 2024 will be full of pitfalls, but we still believe that Quebec’s GDP can demonstrate resilience compared to the rest of Canada, especially due to the lower household debt level,” said Arseneault and King.

The two economists noted that Quebec’s savings rate rose from 12.1% in the second quarter to 12.6% in the third quarter, “which remains much higher than the 5.1% rate recorded nationally.”

It is noted that Canada’s real GDP decreased by 0.3% in the third quarter of this year after rising by 0.3% in the second quarter, according to data released on November 30 by Statistics Canada.