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The sharp decline in oil prices combined with the impact of the COVID-19 pandemic will likely to be a one-two punch to the province’s economy, with the potential of thousands of jobs lost.

Charles St-Arnaud, chief economist at Alberta Central, the central banking facility for Alberta’s credit unions, believes the province could slide into a recession.

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“We expect that the sharp drop in oil prices and the impact of the coronavirus will result in the economy contracting by 1.5 per cent in 2020 and to the loss of about 25,000 jobs in 2020,” St-Arnaud said in a commentary Friday.

He said there a lot of uncertainty remains as to the magnitude of these shocks, especially given the situation of the pandemic remains fluid. It’s also very uncommon to have two big shocks simultaneously affect the economy.

Impact of virus

With a high number of the population likely requiring self-quarantine, combined with the cancellation of events and temporary closures of facilities and business, St-Arnaud said the impact in terms of lost output would be significant.