Canada fell into recession in the first half of the year, posting its weakest results since the 2008 global financial crisis, government data confirmed today. 

The figures add to escalating fears about the health of the global economy, with world stock markets plunging farther today as more gloomy evidence emerged of China's economic slowdown.

The grim numbers were also bad news for Conservative Prime Minister Stephen Harper, just weeks before elections. 

The Canadian economy contracted 0.5% in the second quarter after retreating 0.8%in the previous three months, according to Statistics Canada. By comparison, the US economy grew by 3.7% in the first quarter. 

Canada, the world's fifth-largest oil producer, has been hit hard by the plunge in world oil prices from above $100 last year to about $52 now. 

This is Canada's second recession in six years and it is the only G7 nation in economic retreat. 

Harper has insisted that, oil aside, the rest of the economy is doing well, although the figures point to broad declines. But opposition leaders say Harper's economic policies are a dismal failure and insist the country must change course. 

According to Statistics Canada, lower business investment was the main contributor to the decline, with outlays falling in machinery and equipment, communications and audio and video equipment, furniture, fixtures and prefabricated structures, and intellectual property products. 

The mining, quarrying and oil and gas extraction sector posted a "notable decrease," for a second consecutive quarter, said the government statistical agency. 

New housing construction also fell, but this was mitigated by an increase in renovations and strong resale activity. 

Household consumption also rose. Canadians bought more cars and trucks, insurance and financial services, as well as food, beverages and accommodation services. 

Overall, exports edged up 0.1% after decreasing 0.3% in the first quarter. Imports declined 0.4%.