BUSINESS
02/13/2020 10:35 EST

Canadian Economy Will Be 'Significantly Weaker' Than Expected, Parliament Watchdog Says

The coronavirus is just one reason the PBO slashed its outlook for the final months of 2019.

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OTTAWA ― Canada’s budget watchdog says economic growth during the final quarter of 2019 will be “significantly weaker″ than predicted in its fall report.

In its latest report on near-term growth, the parliamentary budget office says real GDP growth in the final three months of last year will likely come in at near-stagnant levels, at an annual rate of 0.3 per cent.

Watch: Will Canadians see a recession or a pay hike in 2020? Story continues below.

 

That’s down from the PBO’s November prediction of 1.6 per cent growth in the fourth quarter.

Parliamentary budget officer Yves Giroux blames the weakness mainly on what he describes as temporary disruptions in the mining, oil and gas, motor vehicle and rail transportation sectors.

His report today projects real annual GDP to grow of 1.5 per cent in the first quarter of 2020, which is also slower than previously projected, partly as a result of weaker business investment and the economic effects of the coronavirus outbreak.

The report also predicts the federal budgetary deficit for fiscal year 2019-20 will reach $23.5 billion ― roughly 10 per cent higher than projected in November ― as new government spending measures come into effect.