FXStreet reports that analysts at the National Bank of Canada (NBF) note that the oil price collapse and operational shutdowns mandated by federal and provincial governments due to the coronavirus pandemic are not surprisingly weighing on Canada's economic growth and employment.

“The Canadian economy likely entered recession in the first quarter of 2020 as evidenced by soaring employment insurance claims. Those concerning numbers on claims will be followed by less timely data on GDP showing a massive contraction in March courtesy of forced shutdowns.” 

“Taking account of closures ordered by the government, our bottom-up analysis suggests a sharp decline of GDP can be expected in Q1 followed by a steeper drop of over 30% annualized in Q2, before a subsequent rebound in the second half of the year.” 

“2020 real GDP growth is pegged at -4.8%, the largest annual contraction on records going back to 1961.”