While Canada is entering its third wave of the global pandemic, a new poll has suggested the economy will suffer a sharp decrease this quarter to around 3.6 percent. This is a downgrade from the 6.7 percent predicted in January.
It was also forecast to grow up to 6 percent in the third quarter and 5.5 percent in the fourth.
This is also a decrease compared to the 6.8 percent and 5 percent previously predicted.
However, experts have said tighter lockdown restrictions from a third wave of the virus were unlikely to derail the economic recovery.
Sri Thanabalasingam, senior economist at TD Economics, said: “Canada is undergoing a third wave of the virus and while caseloads are accelerating, the resiliency the economy has shown in the face of the second wave suggests it can ride out the third wave as well, without considerable economic consequences.”
In the poll – which ran from April 12 to 16 – economists forecast the economy would grow on average 5.8 percent this year.
Last year, Prime Minister Justin Trudeau promised a fiscal package, which is expected to be revealed on April 19.
Out of those economists surveyed in the poll, more than half of them said the fiscal package would help boost the economy recovery significantly.
Tony Stillo, director of Canada economics at Oxford Economics, said: “The economic impact of the federal government’s promised C$100 billion fiscal stimulus will depend most importantly on its make up.
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“While it will also upgrade its GDP forecasts, we expect it to make an offsetting change to its estimate of the economy’s potential, implying the Bank will not materially alter its assessment of when interest rates need to rise.”
Canada is facing its third wave of the pandemic as infections soared past 9,500 yesterday for the first time since last year.
The death toll also rose by 55 bringing the overall total to 23,500.
Yesterday, the Canadian Prime Minister said the UK is facing a “very serious third wave” despite the successful vaccine rollout.
He told the Canadian Parliament: “We know for example that the UK is ahead of just about everybody else on vaccinations and yet they maintain very strong restrictions and are facing a very serious third wave.
“Vaccinations on their own are not enough to keep us safe.”
However, Prime Minister Boris Johnson’s spokesperson hit back at the claims and said: “I don’t have a specific response for Justin Trudeau but I think the case data speaks for itself with this.
“Case numbers are down and ditto for hospitalisations and deaths and that’s a tribute to our vaccine rollout and the work of the British public and our NHS.”