Canada: V-shaped recovery is not on the cards – CIBC

Benjamin Tal and Taylor Rochwerg from CIBC Capital Markets look at what to expect from the Canadian economy on a 3-month view.

Key quotes

“It’s reasonable to assume that after falling by 28% in the second quarter, economic growth will return to positive territory in the third quarter, but a V-shaped recovery is simply not in the cards.”

“Overall GDP growth is projected to rise by close to 17% during the third quarter, while construction activity will also rebound to a still-historically low level of activity.”

“We expect household spending to grow by close to 10% in the third quarter, as many stores reopen, and pent-up demand is released.”

“While we see some rebound in overall economic activity, we might see a slower reaction in the improvement in the unemployment rate, which we expect to remain elevated in the third quarter.”