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The Canadian economy grew at an annualized rate of 2.6 per cent in the third quarter, Statistics Canada said on Friday, avoiding a technical recession largely due to a surge in defence spending.
Government spending on weapons systems, up by 82 per cent in the third quarter, led the surprise growth alongside an uptick in crude oil exports.
However, business spending was virtually unchanged in the third quarter, according to StatsCan, and household spending declined as fewer people purchased cars.
The data agency revised second quarter GDP figures to a 1.8 per cent decline, and noted that third quarter GDP might be subject to a larger-than-usual revision in February due to missing data from the U.S. government shutdown.
An economy enters a technical recession when it has two consecutive quarters of negative growth.
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