(Bloomberg) -- Canada’s economy showed surprising strength at the end of last year, even amid a new wave of Covid-19 restrictions.

Gross domestic product expanded at a 9.6% annualized rate in the fourth quarter, according to a preliminary estimate released Tuesday by Statistics Canada in Ottawa. That’s much faster than the 7.3% median forecast in a Bloomberg survey. A flash estimate from the agency showed GDP on track to grow 0.5% in January, defying expectations for a contraction.

The report will ease concern about the economic costs from a second wave of lockdowns that has closed large parts of the country. The numbers make it unlikely the economy will contract in the first quarter of this year, as many economists had been expecting.

For all of 2020, Canadian GDP shrank 5.4%, which matches expectations but marks the steepest annual decline in records back to 1961. That’s a bigger hit than in the U.S., which recorded a 3.5% drop in output.

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