Canadian Economy Will Struggle In Q1 2021, Predicts Reuters Poll

2 min read | January 19, 2021 03:35 AM AEDT | By Hina Chowdhary

Canadian Economy Will Struggle In Q1 2021, Predicts Reuters Poll

COVID Second Wave To Impact Canada’s Q1 2021 Economic Growth

Canada’s economic activity had managed to recuperate from COVID-inflicted lows to a certain extent in the first half of 2020, up by 7.5 per cent in the first quarter and over 38 per cent in Q2 2020 last year. As the phased lifting of lockdown began across the country, the economy expanded by a record annualized rate of 40.5 per cent in the third quarter.

But then hit the second wave of COVID infections. As containment measures were tightened, the economic recovery began deflating once again. Over 40 economists who participated in the Reuters poll estimated that the Canadian economy grew by just 3.8 per cent in Q4 2020.

While the COVID-19 vaccination process started near the end of December, the second round of lockdown protocols were still widespread and expanding. With this, the economy was heading for the first quarter of 2021 on a “wobbly footing”.

©Kalkine Group 2020

After a contraction in Q1 2021, some of the economists believe that Canada will see a sturdy economic rebound in the second half as the vaccination campaign gains momentum.

But with all the positive impact of the inoculation process taken into account, the Canadian economy is expected to growth by about 4.4 per cent in 2021, which is the weakest forecast for the year since January last year, as per Reuters. While 16 of 23 economists predicted the Canadian GDP to hit pre-COVID levels in a year’s time, five believe it will take up to two years and two of the experts feel it will take longer than that, as per the Reuters poll.

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