The Canadian economy contracted a record 9% in March as a result of the crisis caused by the COVID-19 pandemic, the largest monthly contraction in the modern history of the country, as reported by the public agency Statistics Canada on Wednesday ( EC).
EC pointed out that the figure is provisional and that the contraction in March will cause the gross domestic product (GDP) to fall 2.6% in the first quarter of the year.
“Among the hardest hit by social distancing measures and government restrictions are sectors related to travel and tourism, such as transportation, restaurants and accommodation,” said EC.
The public agency added that personal services, retail sales, entertainment and sporting events and cinemas have also suffered serious losses as a result of COVID-19.
On the other side of the coin, the health sector, food distribution, sales and entertainment services on the Internet grew in March.
Analysts predict that the April figures will be even worse because Canada only adopted measures of social distancing, voluntary confinement and restrictions on economic activity in the second half of March.
The release of provisional data for March comes a day before the Bank of Canada is to release its interest rates, which currently stand at 0.25% after three emergency cuts in the face of the spread of the new coronavirus causing COVID-19.
In early March, the Bank of Canada benchmark interest rate was 1.75%.
Economists predict that the Canadian monetary authority will keep interest rates at 0.25%.
Canadian Prime Minister Justin Trudeau warned Tuesday that social distancing measures and other restrictions are likely to remain in the country until there is a vaccine against COVID-19.
Experts believe it will take six to 18 months to get the vaccine.
Also on Tuesday, the International Monetary Fund (IMF) said the Canadian economy will contract 6.2% this year as a result of COVID-19.