OTTAWA - Canada's economy grew for the first time in 11 months in June, an encouraging signal that the country's first recession in almost two decades is over.

The June growth of 0.1 per cent was less than the consensus economist forecast of 0.2, as was the second-quarter contraction of 3.4 per cent, in annualized terms.

And Statistics Canada revised the first-quarter retreat from the previously reported 5.4 per cent to 6.1 per cent - not only making it the worst quarterly contraction on record dating back to 1961, but making the quarterly and June numbers slightly less impressive because they stem from a lower starting point.

Still, economists said the big picture was that after a relatively short but sharp slide, the Canadian economy is finally looking upwards.

"Canada's recession is finally over," said economist Krishen Rangasamy of CIBC World Markets."

"The good news is that Canada's output has stopped contracting ... and with the auto plant restarts in July, coupled with inventory replenishments on both sides of the 49th parallel, Canada should see a big bounce in the third quarter (the current July-September period)."

Bank of Montreal deputy chief economist Douglas Porter also said the June number signalled that the recession ended in mid-year, adding that the country's domestic demand actually began recovering earlier, sometime in the spring.

Canada's economy is still being hobbled by an extremely depressed exports sector, low corporate profits and weak business investment, however.

"The big story in the second quarter was that the economy was still facing extreme weakness imposed on it from abroad. We had this deep decline in exports and we had businesses responding to that by really cutting back on capital spending and inventories," he explained.

"The bigger issue is how robust and sustainable the recovery is. This could be a very halting recovery," he added."

Bank of Canada governor Mark Carney forecast last month the economy would bounce back by 1.3 per cent in the third quarter, and even higher moving forward.

But many economists wonder if that kind of straight-line recovery will be possible without real growth in the United States, igniting demand for Canadian exports in oil, wood products, autos and machinery.

On a quarter-to-quarter basis, Statistics Canada said the economy slipped 0.9 for the second quarter as a whole, spanning the months of April through June, but that was an improvement over the 1.6 per cent drop recorded in the first quarter of 2009.

June's growth was driven by higher activity in oil and gas, wholesale trade and real estate.