Lockdowns Hit Canadian Q1 GDP
I find it absolutely amazing that I have access to a Chief Economist within my organization. Dr. Shelly Cooper is an award winning authority on finance and economics and often shares her experience and thoughts so we can all be well informed. She recently shared her thoughts about the Q1 results and I wanted to share my key take-aways.
The first thing I immediately took note of was the fact that despite the decline in Q1 results; we're actually better off than initially anticipated. While the Canadian economy did see a decline of an 8.2% annualized rate, this is much better than the 10% decline that StatsCanada had estimated.
Another key point that was mentioned is that it appears our economy has already bottomed the economic downturn, and GDP growth will take on a positive trajectory from here. While this information won't prevent a drop in Q2 results, it would leave the data tracking on a more “optimistic” end of the -15% to -30% growth range estimated by the Bank of Canada in their last Monetary Policy Report.
The other area addressed by Dr. Cooper was the CMHC report that had been released suggesting a drop in housing prices by 18% and a delayed recovery until 2022. However, the CMHC's own data shows that home prices have actually risen by 5% annually over the past 25 years.
While we are hearing so much doom and gloom, even the Bank of Canada's Governor suggests that the information is overly pessimistic and he asserted his own view that the Canadian economy would recover from it's medically induced coma much faster than these Doomsters are suggesting.