Thursday, March 30, 2023

PBO slashes economic growth forecast, partly blames new virus

Canada’s economy slowed “sharply” in the final quarter of 2019, the parliamentary budget office said Thursday in its February economic and fiscal report.

And the new coronavirus outbreak, combined with lower-than-expected business spending, will likely push economic growth lower in the first quarter of 2020, the PBO projected.

“We expect real GDP to grow by 1.5 per cent in the first quarter of 2020,” on an annual basis, the report said.

“While some of the impact of the disruptions is expected to be reversed, we project slower growth due in part to the coronavirus and weaker business investment.”

The outbreak, which has directly affected China the most but has also been felt by a number of countries including Canada, could shave 0.3 percentage points off Canada’s economic-growth prediction for the beginning quarter of 2020, although the PBO said that was not a certainty.

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