While the Canadian economy has recovered in recent months following the economic decline caused by pandemic closures in March and April, the speed of recovery is expected to slow in the fall and winter with the advent of weather, along with an increase in numbers. COVID-19 cases, the more it disrupts Canada’s economic activity.
“Progress has been made,” says Pedro Antunes, chief economist at the Conference Board of Canada. “But we still expect localized closures and relief in some segments of family spending and business activities to curb Canada’s pandemic recovery in the middle. next year. “
The effect of COVID-19 on the Canadian economy has been immediate and severe. At its lowest level in April, genuine gross domestic product (GDP) was 82% of pre-COVID levels in February, 3 million Canadians ran out of paint, and the total number of hours painted fell by 28%.
Although economic activity has been completely restored in some sectors, many will not see a return to the general until a vaccine is available to the general public, whether in Canada and around the world. Air transport, for example, is almost closed and operates at only 5% of the general levels Accommodation, food and beverage services, textiles, manufacturing, printing, films and sound recordings are examples of industries that remain badly affected dubious futures.
Recently implemented health measures and tests in Canada are expected to save you another complete closure of economic activity, however, localized and regional closures are expected in the coming months and will continue to have a negative effect on the road to recovery. Another thing to keep in mind is what’s happening south of the border: the US recovery of the US and its allies in the middle of the border. But it’s not the first time It is based on the agreement of Congress and the president on new stimulus measures to keep the economy going. Canadian exports to the US have been able to do so. But it’s not the first time They have recovered, but continued progress is tied to U. S. household spending.
Overall, the Conference Board of Canada forecasts that genuine GDP will decline by up to 6. 6% by 2020, which, while significant, is an improvement over the recent Canadian Outlook, which forecasts an 8. 2% decrease this year. enough for the Canadian economy to return to its full potential. In the long run, provincial and federal governments will struggle to control spending, while emerging interest rates will increase business investment and household spending. Canada’s unemployment rate is not expected to return to pre-COVID grades until 2025.
The Canadian government has taken decisive steps to mitigate economic damage, in total, federal stimulus measures will account for more than 12% of GDP by 2020, however, the government will likely have to avoid short-term spending to recover its Conference Board of Canada expects the expansion of federal government intake to slow at an average annual rate of 0. 8% between 2021 and 2025.
Therefore, the Conference Board of Canada expects the Bank of Canada or the U. S. Federal Reserve to raise interest rates until at least 2023.
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