High odds coronavirus will put Canada into a recession: David Rosenberg
The rapid spread of the coronavirus is likely going to send the global economy into a recession, according to prominent Canadian economist David Rosenberg.
“I think very strongly that it probably is going to cause not just a recession in Canada, but a global recession,” the chief economist and strategist at Rosenberg Research and Associates told BNN Bloomberg Thursday.
“There’s going to be, I think, quite long-lasting economic impacts that are just starting right now. And the run rate on global growth was already anemic.”
Markets whipsawed Thursday as investors’ fears about the the virus’s impact deepened. The head of the World Health Organization said the outbreak has the potential to become a pandemic as a rash of new cases emerged throughout the week.
On Wednesday, former U.S. Federal Reserve Governor Kevin Warsh called for coordinated interest rate cuts, led by the Fed, in order to help support the global economy.
The Fed is widely expected to cut rates at its March meeting, while the odds of a Bank of Canada rate cut next week is hovering at 37 per cent. The bank has maintained its key interest rate at 1.75 since October 2018.
Rosenberg warned that the coronavirus could be what tips Canada’s economy over the edge.
“Our economy is not even keeping up with population growth,” Rosenberg said. “There’s no margin for error as far as Canadian growth is conerned.”
“So will this tip us into a recession? I think that’s a high-odds bet right now.”