Article content continued

The situation remains in flux and muddles how household spending, a significant portion of the gross domestic product, will recover, said Kotsopoulis.

“The hope or the silver lining here is that when this is all over, there’s a functioning financial system,” said James Marple, a senior economist at TD Bank. “That was what helped Canada recover faster than the U.S.”

But Marple said that the data suggests Canada’s household borrowing is on the rise again — not to expand assets, but to pay the bills, which could slow a recovery.

On the other hand, some households expenses have declined, and their savings have increased, so the data is not clear.

Even when all social distancing measures are lifted, some people are likely to remain cautious, which could have a lingering effect and make any recovery more gradual rather than instantaneous.

That’s why TD also believes a V-shaped recovery is unlikely. But it is predicting double digit growth in GDP for the latter half of 2020, even if a return to pre-coronavirus GDP levels are not likely until “at very best late 2021,” and more likely in 2022.

In 2020, TD expects Canada’s GDP to decline by 7.6 per cent compared to a 6.5 per cent decline in the U.S. and a 7.4 per cent decline in the U.K. Globally, it is expecting a 4.4 per cent contraction in GDP.

Earlier this month, the International Monetary Fund predicted Canada’s economy will contract 6.2 per cent, slightly more than the average 6.1 per cent decline in advanced economies this year, and that it would register a sluggish rebound of 4.2 per cent in 2021, compared to 4.5 per cent for its peers.

“I don’t think you can just go back to normal after the economic shock we’ve seen,” Marple said, adding, “It’s sort of hard to know how (the economy) rebounds out of this.”

• Email: gfriedman@postmedia.com | Twitter: GabeFriedz