TORONTO (AP) -- The Canadian economy contracted at a 3.4 percent annual pace at the end of 2008, the biggest decline since 1991.
Finance minister Jim Flaherty had indicated he expected Monday's report from Statistics Canada would show the economy has fallen off the table. Economists forecast Canada's gross domestic product would shrink between three or four percent in the October-December quarter.
The 3.4 percent annualized GDP decline is not as steep as the 6.2 percent drop in the United States, the 12.7 percent decline in Japan and the 20.8 percent pullback in South Korea.
The financial crisis and the global sell-off of commodities have hit Canada hard. The central bank expects economic output will contract 4.8 percent in the first quarter of 2009.
Canada lost a record 129,000 jobs last month as the unemployment rate surged more than half a point to 7.2 percent, the single-worst monthly job loss figure in the country's history.
Flaherty has said he needs a free hand in speeding through $2.4 billion in emergency stimulus efforts. The government unveiled a $32 billion economic stimulus package in January.
The decline in growth likely means Canada's central bank's will cut interest rates on Tuesday. The Bank of Canada cut its key interest rate to 1 percent in January.
