Many firms will struggle even with interest-free loans

Deferring firms’ liabilities and offering bridging loans will reduce widespread debt defaults but, as many firms are already heavily indebted, such measures will not prevent bankruptcies and job...

31st March 2020 · 3 mins read

GDP by Industry (Jan.)

The modest 0.1% m/m rise in GDP in January confirms that the economy was struggling even before the coronavirus outbreak. We estimate that GDP will plunge by 35% annualised in the second quarter.

31st March 2020 · 2 mins read

Bank hints at funding for lending & yield-curve control

After its emergency decision to cut its policy rate to 0.25% and launch a quantitative easing (QE) program, the Bank of Canada told us that it will not be taking interest rates negative. Instead, it...

27th March 2020 · 6 mins read

Monetary and fiscal policymakers still have work to do

The Bank of Canada announced further credit easing measures this week and the government’s will expand its fiscal package to $109 bn, from $82 bn, but there are still widespread signs of stress in...

26th March 2020 · 4 mins read

GDP to plunge as unemployment soars

The complete shutdown of large parts of the economy suggests that GDP will plunge by 35% annualised in the second quarter and that the unemployment rate will climb to near 15% in the coming months.

24th March 2020 · 3 mins read

Ultra-low oil prices will have long-lasting effects

Policymakers still need to do much more to reduce the chance that the recession in the first half of the year turns into a more prolonged slump, but there is little they can do to prevent a long...

23rd March 2020 · 10 mins read

Further fiscal support needed

Finance Minister Bill Morneau this week unveiled a fiscal package equivalent to 3.6% of GDP to help offset the disruption caused the coronavirus outbreak. This may be enough to prevent the forthcoming...

20th March 2020 · 4 mins read

Retail Sales (Jan.)

The 0.4% m/m increase in retail sales in January was entirely due to higher prices, with sales volumes falling. That will mark the start of a sustained period of weakness, with respondents to the...

20th March 2020 · 2 mins read

Further fiscal stimulus will be needed

The crisis package outlined today by Prime Minister Justin Trudeau and Finance Minister Bill Morneau will help to cushion the blow from the disruption caused by the coronavirus outbreak. But given the...

18th March 2020 · 3 mins read

Consumer Prices (Feb.)

The slump in oil prices will cause headline inflation to plummet to below 1% in the second quarter, from 2.2% in February. While weaker activity will put downward pressure on core inflation in the...

18th March 2020 · 2 mins read

Likely slump in GDP to prompt bigger policy response

We are now assuming a huge hit to GDP for the next eight weeks or so that results in growth of -10% annualised in the second quarter. But with policymakers acting quickly and working more closely...

17th March 2020 · 4 mins read

Manufacturing Sales (Jan.)

Manufacturing sales fell for the fifth consecutive month in January and, given the disruption caused by February’s rail blockades and the coronavirus outbreak, are likely to fall much further.

17th March 2020 · 2 mins read

Recession now most likely outcome

Following events this week, the Canadian economy seems unlikely to avoid a recession this year. We forecast GDP growth of -4.0% annualised in the second quarter and -0.5% in the third.

13th March 2020 · 8 mins read

Indicators to watch for COVID-19 impact

The timeliest indicators show that fears about the coronavirus are yet to have much impact on domestic activity. But there are worrying signs for international trade and the energy sector, and with...

11th March 2020 · 4 mins read

Bank to slash rates to near-zero

On top of the rapidly spreading coronavirus outbreak, the slump in oil prices raises the risk of recession this year and suggests that the Bank of Canada will slash its policy rate to just 0.25%.

9th March 2020 · 3 mins read