“In our economic scenario, real GDP is assumed to decline by 2.5 per cent in the first quarter of 2020 and then again by 25.0 per cent in the second quarter,” the report said Friday. “For 2020, real GDP growth would be -5.1 per cent, the weakest on record since 1962. “
The report also stated that the budget deficit would rise to $26.7 billion in 2019-20, before ballooning to $112.7 billion in 2020-21 – 5.2% of the GDP and the worst since 1993-94.
The report does note that before the coronavirus-induced downturn the government’s books were in order.
The COVID-19 pandemic has left large swaths of the global economy in tatters, with Canada being no exception.
As entire of sectors of the Canadian economy remain on lockdown, nearly a million Canadians have applied for employment insurance in the past week as thousands of jobs continue to be slashed in the wake of the pandemic.
This has prompted the Canadian officials to take drastic measures, including two stimulus packages – a $56 billion dollar emergency response benefit and the $68 billion dollars in economic support for business, announced earlier today – as well as lowering the overnight rate to 0.25 percent, the lowest threshold, in an effort to maintain liquidity level according to Bank of Canada Governor Stephen Poloz.