Canada Economic Forecast
June 2, 2020The economy tumbled in the first quarter, as non-essential businesses were forced to close in March. Private consumption contracted at a series-record rate in Q1, while investment and exports also declined severely. Turning to the second quarter, economic activity is likely faring even worse: A flash estimate pointed to a 11% contraction in April. Boding ill for household spending, employment levels in April fell by nearly two million from March, pushing the unemployment rate to the highest level since 1982, with roughly 14% of workers having lost their jobs since February. Exacerbating matters, depressed crude oil prices forced Alberta producers to curtail output by roughly 25% in late May, which will be hampering the energy sector and exports in Q2. On a brighter note, in late April the government decided to gradually ease containment measures, while the Canada Emergency Response Benefit should be cushioning the blow to households’ income.
Canada Economic GrowthThe economy is expected to contract sharply this year, amid low oil prices and output, and as a spike in unemployment weighs on private consumption. Nevertheless, robust monetary and fiscal stimulus should limit the downturn. A worsening outlook for the U.S. economy and a possible second lockdown pose significant downside risks. FocusEconomics analysts project a contraction of 6.9% in 2020, which is down 1.1 percentage points from last month’s forecast, before growth of 4.9% in 2021.
Canada Economy Data
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|Bond Yield||1.70||1.00 %||Dec 31|
|Exchange Rate||1.30||0.15 %||Jan 01|
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Canada Economic News
July 2, 2020
In June, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) increased from 40.6 in May to 47.8.
June 17, 2020
Consumer prices increased 0.1% from a month earlier on a seasonally-adjusted basis in May, contrasting the 0.7% drop in April.
June 17, 2020
According to the Teranet-National Bank Composite House Price Index, house price growth decelerated to 1.1% on a month-on-month non-seasonally-adjusted basis in May, weaker than April’s 1.3% increase.
June 8, 2020
Housing starts—excluding the province of Quebec due to the pandemic—decreased to approximately 137,135 units on a seasonally-adjusted annualized rate (SAAR) basis in May, according to the Canada Mortgage and Housing Corporation (CMHC), down from April’s 166,477-unit reading also excluding Quebec.
June 3, 2020
On 3 June, the Bank of Canada (BoC) kept its target for the overnight rate at 0.25%, its effective lower bound.