The situations surrounding COVID-19 are very fluid as is the economic fallout, but economists are certain we are heading for a recession.
“Right now, the most pressing economic concern is we don’t know how long this recession will last,” said Lars Osbers, an economic professor at Dalhousie University and former president of the Canadian Economic Association.
That inevitably means we will be feeling the hurt of COVID-19 for some time as a recession officially occurs when a nation experiences two consecutive quarters of negative growth.
Looking at the Canadian dollar, Osberg thinks it will continue to struggle.
“The Canadian currency like virtually all currencies is tied to the U.S. dollar which is seen as a safe haven by many globally, so you see what we’re currently witnessing. The Canadian dollar struggles while the U.S. dollar rises.”
In the last month, the Canadian dollar has lost around six cents to the American dollar. It’s currently worth around $0.69 USD.
Key indexes have also witnessed record-breaking losses.
The TSX has lost around 6,000 points since Feb. 19, representing about a third of its value. The Dow Jones has seen similar losses of around 9,000 points or 22 per cent of its value.
A particular concern Osberg has is those most vulnerable.
“It’s all well and good for someone like me to social distance at home but for the homeless or people living paycheque to paycheque they will undoubtedly feel this the most.”
Osberg says economists sit in a similar situation to many other fields, in that they simply need more information to fully understand the scope of the issues to come.
