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TORONTO, Aug. 31 (Xinhua) – The Canadian economy in the second quarter of this year dropped to its worst performance in seven years, Statistics Canada said Wednesday.

The federal agency said real gross domestic product (GDP) fell at an annualized rate of 1.6 percent in the three-month period, due in large part to the wildfires that destroyed parts of Fort McMurray in Alberta province.

That's the biggest quarterly decline since the second quarter of 2009 when Canada was in the midst of the global financial crisis.

The contraction reported Wednesday was in contrast with growth at an annual pace of 2.5 percent in the first quarter, which was revised from an initial reading of 2.4 percent.

Economists had expected a drop of 1.5 percent in the second quarter.

The drop in GDP came as exports of goods and services fell 4.5 percent in the quarter following a 1.9 percent increase in the first three months of the year. Exports of goods were down 5.5 percent, while exports of services grew 0.6 percent.

Already hurting from the drop in energy prices, the Alberta wildfires dealt a blow to the energy sector, forcing the evacuation of Fort McMurray and shutdown of several oilsands operations in the region.

Energy product exports fell 7.5 percent, with crude and bitumen exports declining 9.6 percent and refined petroleum products down a whopping 19.6 percent. Motor vehicles and parts also dropped 5.8 percent due to lower exports of passenger cars and light trucks.

Exports of aircraft and other transportation equipment and parts were up 5.6 percent.

However, despite the pullback for the quarter as a whole, the Canadian economy ended the quarter with growth in June.

Statistics Canada said real GDP rose 0.6 percent that month, boosted in part to non-conventional oil extraction as production in the Alberta oilsands region started to resume.

Mining, quarrying and oil and gas extraction climbed 3.6 percent in June, boosted by 12 percent gain in non-conventional oil extraction.

The second-quarter result reported Wednesday was worse than forecast by the Bank of Canada in its July monetary policy report.

The central bank had predicted that the economy would contract at an annual rate of 1.0 percent during the second quarter due to the damage caused by the wildfires.

But the Bank of Canada has also predicted that growth will pick up in the third quarter to an annual pace of 3.5 percent as oil production ramps up and rebuilding efforts begin in Fort McMurray.

It also expects the federal government's new Canada child benefit and a boost to infrastructure spending to lend a hand to the economy.

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