Canadian Economy to Approach Recession This year, According to Goldman Sachs
The global economy had a hard time in the last two years, after central banks, especially the FED had been hiking interest rates, drying up liquidity in markets, as well as from the trade war. The Canadian economy also weakened and then improved somewhat, but it seems like the economy is weakening again and it might fall into recession.
The collapse in oil prices is pushing Canada towards recession, according to Goldman Sachs. They have cut their 2020 GDP growth forecast to +0.2% from +0.7%. By quarter they see:
- 2020 GDP forecast to drop to +0.2% from +0.7%
- Q1 is expected at 0%
- Q2 is expected at-0.5%
- Q3 is expected at 0.25%
- Q4 is expected at 1%
They see the Bank of Canada cutting interest rates by 100 basis points to take rates back to the 2009-10 low of 0.25%. The CAD opened with a 300 pip bearish gap lower yesterday, after Crude Oil had crashed over the weekend, but the CAD has been holding well in the last few sessions. Although, according to these forecasts, the CAD should tumble soon.
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