Economic outlook | June 2020
Unprecedented in every way
The global and Canadian economies are in the midst of the worst recession since the Great Depression. The IMF is projecting the world economy will contract by at least 3 percent this year, a sharp reversal from growth of 3.3 percent anticipated in January 2020. For advanced economies, like Canada, the downturn looks to be twice as deep as the 3.3% in 2009, while emerging economies in aggregate will experience the first decline in output on record. Fortunately, the tide appears to be turning with growth expected to return in 2021.
The economic fallout has been dramatic to date. As the COVID-19 virus morphed from a local epidemic to a global pandemic, governments around the world implemented containment measures such as “stay-at-home” orders and shut down non-essential businesses. Global trade stalled as economic shutdowns severely disrupted supply chains and took a bite out of demand.
The Canadian economy will suffer a deep recession this year, but the tide is already turning. The key risk is a second round of infection, particularly if it leads to renewed lockdowns. So long as this does not occur and the gradual reopening continues globally, a recovery should unfold in Canada in the second half of 2020.
The pandemic, lockdown and reopening are fueling many trends that will not only shape the recovery but will also effect the performance of Canadian industries. The recession will also leave behind deep and transformative legacies: the shift to digital, AI & automation, and remote work. All can be productivity enhancing, but can also have labour market consequences sooner than was anticipated.
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A collection of webcasts sharing Deloitte’s insights related to COVID-19
Craig Alexander is the first Chief Economist at Deloitte Canada. He has over twenty years of experience in the private sector as a senior executive and leading economist in applied economics and forecasting. He performed macroeconomic research, regional and sector analysis, and fiscal market forecasting and modelling.
Craig is a passionate public speaker and holds a graduate degree in Economics from the University of Toronto.