OTTAWA — The spreading coronavirus outbreak will trigger a short, sharp global recession this year before the world’s economy bounces back in 2021, Canada’s trade financing agency predicted on Monday.
Export Development Canada said in its twice-yearly forecast that the recession would largely occur during the first half of 2020, but noted that unlike the 2008 fiscal crisis, global demand was not fundamentally weak.
“Recession is practically unavoidable at this point,” said Peter Hall, the agency’s chief economist.
“Global growth will be exceptionally weak this year before we see a strong rebound in 2021,” he added in a statement.
Recession is practically unavoidable at this point
The agency said global growth in 2020 would be just 1.6 per cent — the worst performance since the financial crisis — before posting a 5.3 per cent gain in 2021. Its predictions for Canada were 0.4 per cent in 2020 and 3.8% in 2021.
Canada, a major crude exporter, has been hit by an oil price war as well as lower demand. The Canadian dollar hit a four-year low on Thursday before recovering a little on Friday.
© Thomson Reuters 2020