{"id":249,"date":"2020-03-12T20:36:23","date_gmt":"2020-03-12T20:36:23","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/2020\/03\/12\/economic-forecasting-in-turbulent-times\/"},"modified":"2020-03-12T20:36:23","modified_gmt":"2020-03-12T20:36:23","slug":"economic-forecasting-in-turbulent-times","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/canadian-analysis\/featured-analysis\/insights\/economic-forecasting-in-turbulent-times\/","title":{"rendered":"Economic Forecasting in Turbulent Times"},"content":{"rendered":"

In the days during which we were trying to pin down our economic projections, the coronavirus ricocheted through global markets; oil prices cratered; the Bank of Canada, the Federal Reserve and the Bank of England all slashed their key interest rates by 50 basis points; and Ottawa joined other governments in announcing support<\/a> to offset the economic shock of the outbreak.<\/p>\n

The unfolding crisis upended our typical process of projecting the near-term course for the economy, which draws on economic data, theories and judgement. This time it was an iterative process, with each gap in financial markets or report of another country waging battle against the virus causing us to review our assumptions as we tried to paint the clearest economic picture we could in rapidly changing circumstances. <\/p>\n

It will be some months before we get a solid picture of the damage that COVID-19 inflicted on Canada and other economies. We believe the damage will be considerable, in the short term\u2014pulling Canada and possibly other countries into the first recession since the financial crisis, even if governments take aggressive action to instill business confidence and assist affected workers. But like all difficult times, this too shall pass. We currently expect the second half of 2020 to look better than the first, as the worst of the coronavirus fades and coordinated policy actions restore confidence. <\/p>\n

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