Canada’s annual inflation rate rose to 3.3 per cent in July, but one economics professor says last month’s lower inflation number was likely an “illusion,” and warns that the country may be about to enter a recession.
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Expert: Canada likely entering a recession, or already in one
The COVID-19 pandemic has caused havoc on economies around the world, and Canada is no exception. With businesses shuttered, unemployment skyrocketing, and consumer spending plummeting, experts are warning that Canada is likely entering a recession, if it hasn’t already.
David Rosenberg, a renowned economist, recently expressed his concerns that the Canadian economy is on the brink of a recession. He argues that the combination of the pandemic-induced shutdowns and the declining oil prices are significantly impacting the nation’s economy. He also noted that the second quarter GDP could contract by more than 40%, which would be the steepest contraction in Canada’s history.
One of the key indicators of a recession is the rising unemployment rate. In April alone, Canada lost nearly 2 million jobs, pushing the unemployment rate to a staggering 13%. This is the highest unemployment rate since the Great Depression. Large sectors of the economy, including hospitality, retail, and manufacturing, have been hit hard by the lockdowns and are experiencing significant layoffs.
Another factor that suggests Canada may be entering a recession is the steep decline in consumer spending. With businesses closed and people practicing social distancing, Canadians have drastically reduced their spending. A recent report by RBC Economics shows that consumer spending has fallen by almost 20%, the largest drop on record. This reduction in consumer spending has a ripple effect on businesses, leading to further layoffs and closures, exacerbating the economic downturn.
Furthermore, Canada’s housing market, which has been a significant contributor to the economy in recent years, is starting to show signs of strain. The Canadian Mortgage and Housing Corporation predicts a significant decline in housing prices, potentially dropping by 9-18% over the next year. A decline in housing prices not only affects the real estate sector but also impacts homeowners’ ability to access credit, hindering domestic consumption further.
The federal government has implemented various measures to offset the economic damage caused by the pandemic, such as the Canada Emergency Response Benefit (CERB) and the Canada Emergency Wage Subsidy (CEWS). However, these measures are temporary and may not be enough to fully mitigate a recession. As the restrictions are gradually lifted and the economy starts to reopen, the true impact on businesses and the overall state of the economy will become clearer.
It is worth noting that while all indications point towards Canada entering a recession, the severity and duration of the recession are yet to be determined. The speed of the economic recovery will depend on several factors, including the containment of the virus, global trade, and government policies aimed at stimulating the economy.
In conclusion, Canada is likely either already in a recession or on the verge of entering one. The combination of the COVID-19 pandemic, declining oil prices, rising unemployment, reduced consumer spending, and a weakened housing market are all signs of an economic downturn. As we move forward, it is crucial for the government to continue implementing policies that support businesses and individuals, with a focus on recovery and long-term stability.
u need to get a loan to buy beef in canada now
venturing into the trading world without the of a professional trader and expecting profits is like turning water into wine her skills set is exceptional.
Cutting the mass immigration into Canada would really help and Canadians wouldn't have to go broke as they are with record high interest rates.
With uneducated liberals and NDP in charge, it’s only going to get worse
Get rid of the pos trudouche and MAYBE we will survive!
Canadian need to do personal cpi . Food, shelter, water bill, electric bill , interest on debts, rental cost, cost of transportation to get to work. and whatever else is in your basket. That will give you a real indication of inflation.
And who was it raising prices causing inflation….?
FOUR HUNDRED AND EIGHTY SEVEN…I'm not making this up…."487" BILLION DOLLARS IN INTREST ON THE DEBT CREATED BY THIS LIBERAL GOVERNMENT….. Now do the math…THIS IS 10.6 TRILLION DOLLARS OF DEBT CREATED BY THIS LIBERAL GOVERNMENT
2:23 With all due respect, most average Canadians are primarily concerned that we're working more, our pay remains the same, and the cost of housing and food is increasing at an alarming rate. We want solutions, not explanations.
According to libs theres no problem. We have lowest inflation ever even though housing, food , and gas has doubled and tripled. Voting Pierre poilevre this time..
Crazy an expert is needed to say whats been obvious since the beginning of the pandemic.
Wonder if it wouldve been different if we didnt shut down our economy and instead shut down our borders/flights/ports…
Thanks, captains obvious. Trudeaus CT, Trudeaus reckless govt spending every time he gets on his carbon jet is the main cause of sustained inflation.
Expect it to get worse as long as Trudeau is in office.
Hey Canada:
How is the Liberal/NDP governance working out for you?
I hope it’s getting worse, much worse. Pain teaches!
We knew it last month and this economist is redundant
Liberals need to go, time for an election
Liberal party and NDP worst government ever under Trudeau and his leberals and NDP leader Jagmeet jag sold out Canadian s to walk and hold trudeau s hand can't believe Jagmeet support s the worst government ever under Trudeau
It doesn't matter if Canada is in a recession or not. Canada's economy sucks it might as well be in a recession 24/7 365. No1 on earth would care about Canada's economy.
We are "entering" a recession? We are already in one! haha. These experts…
Don't worry everything will be fine. Remember to vote for Blackface.
Supply chain issues? Is anyone still believing that excuse?
Vote liberal yaaayyy
welcome to what we knew 18 months ago
We are likely to be in a recession. We are in a recession. Stop trying to sugarcoat how bad it is.
…OR entering a new one. So the “experts” don’t know? Isn’t there a definitive sign to signify we’re in a recession?
Justin must be proud
more like were in the next great depression or going into it
We know who to thank, it just keeps getting worse.
Likely you say……….
Thank goodness for those experts, otherwise how would we know that inflation is up?
Ask 10 economists about the economy and you get 14 opinions – ask a Professor of Economics and you get 20 opinions
We’ve been circling the bowl since Turdy and his liberal minions were elected 7 long years ago,now we’re being flushed.
Not yet. With the crazy spending in the malls and restaurants, like a drunken sailor, using credit cards and credit lines, no recession yet till we have massive layoffs
Simple stop the immigration
Flush it
Liberals NDP let it make skid marks on the way out.
I’m 100% to vote ☑️ Poilievre!!
Its not even close to being done..the real inflation rate is about 20 percent. The real unemployment numbers are about the same..i can see 20 % interest again coming
The liberals are destroying Canada.
Thats some awful background graphics. And why choose to have the inside of an empty building?