The Canadian economy plunged by about 9 per cent in March, and the Bank of Canada expects the downturn to be the “sharpest on record” as COVID-19 inflicts devastation on business activity.
In a preliminary estimate, Statistics Canada on Wednesday said March’s decline in gross domestic product would be the largest one-month contraction in records dating back to 1961. For the entire first quarter, GDP would decline by 2.6 per cent, or greater than a 10-per-cent drop at an annualized rate.
Under normal circumstances, Statscan releases its March GDP figures in May. However, given the swift downturn resulting from the novel coronavirus, Canada’s national statistical agency moved to publish a timelier estimate of activity. Statscan stressed that the estimates will change once more information is used in the full report released next month.
“Economic disruptions have been both deep and widespread in the month of March,” Statscan said, noting that industries such as travel and tourism, restaurants, accommodation and retailing have taken major hits. It said, however, that activity in the health sector, food distribution and online retailing has been expanding.
Meanwhile, the Bank of Canada on Wednesday made the extraordinary move of omitting eagerly awaited new economic projections from its quarterly monetary policy report, saying that forecasting can’t be done “with any degree of confidence” in light of the uncertainty surrounding the COVID-19 crisis.
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