The collapse in oil prices and the operational closure mandated by the federal and provincial governments due to the coronavirus pandemic is not surprisingly weighing on economic growth and employment in Canada, per the National Bank of Canada.
“The Canadian economy is likely to enter a recession in the first quarter of 2020 as evidenced by the surge in labor insurance claims. Claim-related figures will be followed by less timely data on GDP showing a massive contraction in March due to forced termination. ”
“Considering the closure ordered by the government, our bottom-up analysis indicates a sharp decline in GDP can be estimated in Q1 followed by a sharper decline of 30% annually in Q2, before the next rebound in the second half of the year. ”
“2020 real GDP growth is pegged at -4.8%, the biggest annual contraction on record going back to 1961.”
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