Expectation for Canadian economy is contraction of 6.2 percent this year

Economy around the world will shrink three percent this year: IMF

OTTAWA (NEWS 1130) — This will be the worst year for the global economy since the Great Depression, according to a 2020 forecast from the International Monetary Fund.

The economy around the world will shrink three percent this year, in the view of the IMF, compared to the 0.1 per cent dip in the global financial crisis in 2009.

As for Canada, the expectation is for a contraction of 6.2 percent this year, before the country springs back with 4.2 percent growth in 2021.

“The COVID-19 pandemic is inflicting high and rising human costs worldwide. Protecting lives and allowing health care systems to cope have required isolation, lockdowns, and widespread closures to slow the spread of the virus,” reads the report from the IMF.

The Canadian economy is expected to contract 6.2 percent this year, before the country springs back with 4.2 per cent growth in 2021. (Courtesy International Monetary Fund)

“The health crisis is, therefore, having a severe impact on economic activity.”

Before the virus emerged, the IMF had outlined projections of 3.3 percent global growth.

As for the IMF analysis, the organization admits whether the forecast gets bad or worse will come down to how long the coronavirus pandemic drags on.

Prime Minister Justin Trudeau, during his daily briefing Tuesday in Ottawa, suggested the Canadian economy won’t reopen for weeks. When it does, he added, the recovery will happen in phases.

Q – how will economy reopen?@JustinTrudeau reality is it will be weeks still.

When it starts will be in phases.

Discussions with provinces ongoing related to each regions status with the virus.

“It will be a while.”#bcpoli #covid19 @NEWS1130 — LizaYuzda (@LizaYuzda) April 14, 2020

“I know everyone is very interested to know when things are going to get back to normal, when they’ll be able to get back to work, when we’ll be able to leave this isolation at home, when kids will be able to go back to schools,” he said.

“The reality is, it is going to be weeks, still.”

Trudeau pointed out that provinces are at different points on the pandemic curve, so until a vaccine is ready, they will continue to work together on reopening the economy.

“It’s going to be a while, still.”

Trudeau was also asked about a plan to bail out the struggling oil industry in Alberta, and said discussions are ongoing.

“We will, and we are looking at more specific sector-related relief and supports for those sectors that are hardest hit, whether that’s the tourism sector, the airline sector, or the oil and gas industry or others, and we will have more to say on that shortly.”

He also announced nearly $130-million for northern communities to help them through the COVID-19 pandemic.