The Bank of Canada (BoC) expects GDP to contract between 15% and 30% from the end of 2019, BoC deputy governor Timothy Lane said on Wednesday.
Additional things to remember
“Overall, there will likely be downward pressure on inflation once the coronavirus is stopped.”
“We are likely to emerge with weaker demand and supply than before; the scars associated with the closure could reduce productivity, which tends to lead to higher inflation.”
“The bank’s analysis suggests, however, that the decline in the mood for demand, in part due to weakening business and consumer confidence, is likely to have a greater effect.”
“Monetary policy will continue to manage the risk that inflation will stray constantly from its target in both directions.”
“Post-crisis sector adjustments may cause damage to Canadian production capacity that can be deep and lasting.”
“The standard consumer price index is currently less significant, given the drop in gas prices and the trend in spending.”
“There is a risk that the domestic and global recovery may occur in spurts.”
“The layoffs are concentrated in the service sector, where labor mobility is normally high.”
“A new challenge facing the bank is a dramatic increase in the funding needs of the federal and provincial governments which coincides with the increased credit needs of the private sector.”
The USD / CAD pair recovered slightly from the lows of the session and was last seen to fall 0.27% on the day to 1.3905.