Canada's economy rebounded at a record annualized pace of 40.1 percent in the third quarter after the country emerged from a pandemic lockdown, the government statistical agency said Tuesday.

The upturn  which fell short of analysts' expectations -- reflected substantial increases in housing investment and household spending, as well as a surge in exports due to growth in major trading partners' economies.

The massive increase in GDP erased a deep plunge of more than 38 percent in the previous three months, but the momentum may already be fading as a second wave of  the coronavirus more deadly than the first -- forced several regions to reintroduce measures to slow its spread.

"The economic recovery in Q3 wasn't as sharp as had been expected, but still took GDP miles above where it stood during the depths of the crisis," commented CIBC analyst Royce Mendes in a research note.

He said that a 0.2 percent advance in October from the previous month was a positive start to the fourth quarter, but added that "the economy faces a December with harsh restrictions that will likely see another contraction in economic activity."

From quarter to quarter, the Canadian economy grew 8.9 percent, following an 11.3 percent drop in the second quarter and a 1.9 percent decline in the first, Statistics Canada said in a statement.

The data's release comes one day after Ottawa projected its budget deficit this year would balloon to Can$382 billion and unveiled the largest economic relief package since the Second World War between Can$70 billion to Can$100 billion over three years starting in April 2021 to jolt the economy once the pandemic is over.

(With input from agencies)