As COVID-19 spreads and oil prices plumb record lows, the dreaded “R” word — recession — is starting to resurface in Canada.
A rising number of COVID-19 cases in the U.S. raises the risk of dwindling demand and major supply chain disruptions for Canadian businesses, some analysts say. At the same time, the oil price war between Russia and Saudi Arabia, both of whom have pledged to flood the market with ramped-up supply, bodes ill for Canada’s oil-producing companies.
So is Canada about to hit a recession?
Right now, that’s “almost a coin toss,” said RBC chief economist Craig Wright.
Given the recent oil-price shock and how important the energy sector is for Canada, that risk seems to be rising nearly “by the day,” he added.
Still, for now, Wright puts the odds slightly in favour of Canada being able to avoid an economic downturn.
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