Canadian real GDP contracted 0.5% at an annualized rate in the second quarter, following a 0.8% contraction in the first quarter, Statistics Canada announced today. The Globe and Mail reports Canada has entered into a “technical recession,” but the pain may be short lived.

Despite the weak start to the year, Economist Brian DePratto said in a TD Economics report that there is good reason to believe that the worst is over. Monthly GDP was up sharply in June, providing positive momentum to start the second half of the year.

“With today’s numbers in hand, it now appears likely that we will see a sharp rebound in Q3, with growth expected to reach around 2.5% (q/q, annualized), roughly one percentage point higher than anticipated by the Bank of Canada in its July MPR,” the report stated.