The Unprecedented Coronavirus Crisis: A Conversation with Dawn Desjardins, Deputy Chief Economist at RBC
In this article, we will explore the impact of the coronavirus crisis on Canada’s economy and hear from Dawn Desjardins, Deputy Chief Economist at RBC, about where she believes the country is headed.
Double-Digit Unemployment Rates: A Certainty?
The COVID-19 pandemic has brought unprecedented challenges to the global economy. In Canada, the effects of the crisis have been felt in various sectors, including retail, hospitality, and manufacturing. According to Dawn Desjardins, Deputy Chief Economist at RBC, double-digit unemployment rates are a certainty.
A Conversation with Dawn Desjardins
We spoke with Dawn Desjardins about her views on the current state of Canada’s economy and where she believes it is headed.
Larysa Harapyn: Dawn, thank you for joining us today. I’d like to start by asking you about your expectations for the Canadian economy in this unprecedented coronavirus crisis.
Dawn Desjardins: Thank you, Larysa. It’s a pleasure to be here. As we all know, the pandemic has brought significant challenges to our economy. In terms of employment, we’re expecting a sharp decline in economic activity, which will likely lead to double-digit unemployment rates.
The Economic Impact of the Pandemic
The COVID-19 pandemic has had far-reaching impacts on various sectors of the Canadian economy. The retail sector, for example, has seen significant declines in sales due to lockdowns and social distancing measures. Similarly, the hospitality industry has been severely affected by travel restrictions and closures.
According to a report by RBC, the economic impact of the pandemic will be felt across industries, with some sectors being hit harder than others. The manufacturing sector, for example, is expected to decline significantly due to supply chain disruptions and reduced demand.
A Recovery in 2021?
While the short-term outlook for Canada’s economy appears bleak, Dawn Desjardins believes that a recovery may be on the horizon by 2021.
Dawn Desjardins: "We’re expecting a sharp rebound in economic activity next year as we see improvements in trade, investment, and consumer spending."
However, this recovery will depend on various factors, including government policies, vaccination rates, and global economic trends.
The Role of Government Policies
Government policies play a crucial role in shaping the trajectory of Canada’s economy. In response to the pandemic, governments have implemented various measures to mitigate its impact, such as fiscal stimulus packages and monetary policy easing.
Dawn Desjardins: "Governments have been proactive in providing support to households and businesses affected by the pandemic. However, more needs to be done to ensure that we’re supporting those who need it most."
Monetary Policy and Interest Rates
The Bank of Canada has taken steps to ease monetary policy by reducing interest rates and implementing quantitative easing measures.
Dawn Desjardins: "We expect interest rates to remain low for an extended period as the Bank of Canada seeks to stimulate economic growth."
However, the impact of these measures on inflation remains a concern. Dawn Desjardins believes that inflation may rise in 2021 due to increased demand and supply chain disruptions.
Investment Strategies
As investors navigate this uncertain environment, Dawn Desjardins offers some advice:
Dawn Desjardins: "It’s essential for investors to be cautious and diversified in their portfolios. We recommend investing in sectors that have shown resilience during the pandemic, such as healthcare and technology."
Conclusion
In conclusion, Canada’s economy is facing unprecedented challenges due to the COVID-19 pandemic. While there are concerns about double-digit unemployment rates, a recovery may be on the horizon by 2021.
Dawn Desjardins’ insights provide valuable context for investors and policymakers seeking to navigate this uncertain environment.