The Conference Board of Canada forecasts that the Canadian economy will resume growing in 2021 provided there is not a second coronavirus-related shutdown.
A new Conference Board forecast estimates that Canada’s economy will shrink 8.2% this year, then return to growth with a 6.7% rise in 2021 and 4.8% in 2022. The outlook is at the top end of the Bank of Canada's most recent estimates and is based on 1,200 variables.
Meanwhile, Bank of Canada Governor Tiff Macklem said in a webcast Monday that the central bank expects economic growth will resume in the third quarter. Even so, it also warned the recovery period "will likely be prolonged and bumpy, with the potential for setbacks along the way."
The Conference Board cautioned that its forecast depends on "the country's ability to avoid a second severe outbreak of the COVID-19 virus" that would require another national shutdown.
The private sector think tank projects that the unemployment rate will peak at 13.7% in the second quarter ending June 30, the highest since data was first recorded in 1976. But the Conference Board report says the addition of nearly 300,000 jobs in May and continued easing of restrictions in June likely indicates that the pandemic's worst has passed. It's projecting the addition of another 1.3 million jobs in the July to September quarter, dropping the national unemployment rate to 10.5%.
