Canada's Economy Faces Biggest Ever Contraction Amid COVID-19 Pandemic - Budget Watchdog
The Canadian economy is projected to contract by 12 percent in 2020, the largest decline in the country's recorded history amid the novel coronavirus (COVID-19) pandemic, a report from the country's Office of the Parliamentary Budget Officer said on Thursday
TORONTO (Pakistan Point News / Sputnik - 30th April, 2020) The Canadian economy is projected to contract by 12 percent in 2020, the largest decline in the country's recorded history amid the novel coronavirus (COVID-19) pandemic, a report from the country's Office of the Parliamentary Budget Officer said on Thursday.
"For 2020, real GDP growth is assumed to be -12.0 per cent, which would be by far the weakest on record since the series started in 1961," the report said. "To put this in historical perspective, the weakest growth in real GDP on record (of �3.2 per cent) was observed in 1982 - roughly one quarter of our assumed decline."
The report also said the budget deficit would rise to almost $18 billion this year, before ballooning to $181 billion in fiscal year 2020-2021 - 12.7 percent of the GDP and the largest on record.
The report noted that prior to the COVID-19-induced downturn, the government's books were in order. Prime Minister Justin Trudeau has often lauded the country's low debt-to-GDP ratio, which, however, is set to rise to 48.4 percent in 2020-2021.
Despite the generally positive outlook, some Canadian officials expressed concern with rising household debt levels and acknowledged the economic hardship in some sectors and regions of the country even before the pandemic.
As entire of sectors of the Canadian economy remain on lockdown, nearly a million Canadians million Canadians lost their jobs in March, pushing the unemployment rate up 2.2 percentage points to 7.8 percent - the largest one-month increase since comparable data became available in 1976.
According to Federal officials and Government of Canada data, 7.26 million Canadians have applied for the emergency benefit, including some 316,000 submissions this week alone. More than $18 billion worth of emergency income support has already been distributed.
In March, the Office of the Parliamentary Budget Officer projected that the real GDP would shrink by 5.1 percent in 2020, with the deficit rising to $112.7 billion in 2020-2021. Those projects, however, preceded the over $180 billion in stimulus measures that the government set aside to keep Canadian households and businesses afloat amid the pandemic.