- Sonny Scarfone
Principal Economist
Economic News
Quebec: Quarterly GDP
Domestic Demand Was Strong at the End of 2024
March 26, 2025
Highlights
- Economic growth slowed from 1.8% to 1.4% in the fourth quarter of 2024. Quebec’s real GDP grew by 1.4% in 2024.
- However, the details are encouraging, as household consumption and business investment accelerated, particularly in the residential sector.
- International trade declined for both exports and imports.
Comments
Quebec’s economy continued to expand in the final months of 2024, with annualized GDP growth of 1.4% in the fourth quarter. The economy slowed compared to the previous quarter (1.8%), but there were encouraging signs beyond the headlines.
Although final consumption decelerated (see Table 1 for figures), household consumption picked up, partly offsetting weakness in the public sector.
It was a similar story on the investment side, as businesses returned to growth, particularly in residential investment, as we recently reported. However, investment in non-residential structures was down for a third consecutive quarter, albeit partially offset by more positive investment in machinery and equipment and intellectual property. Government spending also put a damper on total investment growth.
That said, we’re seeing a slowdown in trade, with exports falling more substantially than imports. This is unfortunate given that today’s figures predate the start of the new US administration. However, we expect a rebound in the first quarter of 2025 as businesses try to get ahead of tariffs. (Canadian trade data has been trending in this direction so far this year.)
Implications
Quebec’s economy grew 1.4% in 2024, in line with our most recent projections. This is comparable to national growth and sets the stage for a much more challenging year. We expect Quebec’s real GDP to grow by 0.9% in 2025 and contract in three out of four quarters, pushing the province into a recession.
The slowdown we saw from Q3 to Q4 2024 was attributable to a drop in foreign trade and government spending. In this regard, Quebec’s 2025–2026 budget, tabled yesterday (see our analysis), signalled the government’s intention to address the expected private-sector slowdown through support measures, by encouraging innovation, and by adding $11B to the Quebec Infrastructure Plan (QIP) for 2025–2035, with most of the additional investments occurring over the next three years. These commitments will limit the severity of a potential recession, which will of course remain contingent on the US administration’s changing tariff policies.
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