How bad will Canada’s COVID-19 recession be?
2 million jobs could be at stake, and the economy could shrink by more than it did in 2009
The black swan has landed.
The novel coronavirus pandemic is well underway worldwide, but it wasn’t until this month that Canadians started coming to grips with the economic pain it can bring, in addition to its heavy human toll.
Economists are struggling to come up with best guesses as to what might be coming. There’s still a lot that they — and we — don’t know. But the picture they’re painting for Canada’s financial future is already bleak.
GDP could significantly contract
At a minimum, the Conference Board of Canada is assuming that most industries across the country will be essentially shut down for at least six weeks.
If they take an optimistic view and assume that’s enough to contain the outbreak, even that short term pain will make a major dent in the country’s total output, a metric known as the Gross Domestic Product, or GDP.
Should this relatively mild scenario come to pass, Canada’s economy would eke out a tiny 0.3 per cent growth for 2020 as a whole as things ramp up in the latter half of the year. That’s far from booming — Canada’s economy grew by 1.6 per cent last year, for example — but it’s preferable to other alternatives.
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