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COVID-19 restrictions | National Bank cuts economic growth in Quebec

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Maria Gill
Maria Gill
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National Bank economists lowered their growth forecast for Quebec’s economy for 2022 due to the severity of the health restrictions against COVID-19 that have been brought back to their previous status since December.

Updated Jan 17th

Martin Valeris

Martin Valeris

“In Quebec, (anti-COVID-19) measures are the most severe in Canada, and are likely to limit economic growth. Thus, we are forced to lower our estimate of real GDP growth in Quebec by more than half a percentage point for 2022,” monthly economic Posted on Monday.

Thus, they subtracted three-quarters of a percentage point (0.7%) from their forecast of 3.3% growth in Quebec’s economy in 2022 that they had released just over a month ago.

Their growth forecast for Quebec was lowered from 3.3% to 2.6%, falling to last among the GDP forecasts for the ten provinces, as well as for the Canadian economy as a whole.

These forecasts were also revised downward by the Economists at the National Bank, but on a smaller scale (from 0.3% to 0.5%) compared to the size of the revision of Quebec’s economic growth forecast.

The growth rate gap that was already projected to be unfavorable for Quebec in 2022 is likely to widen compared to Ontario and Canada as a whole.

That gap could be as high as 1.3% against Ontario, while growth forecasts for this neighboring province were cut by half a percentage point to 3.9% by economists at the National Bank.

Compared to the Canadian economy, where the bank’s economists cut their forecast from 4.1% to 3.6% in 2022, the unfavorable difference in real GDP growth in Quebec could be as much as one percentage point.

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“The gap in the strictness of the health measures imposed on the residents of Quebec has not been very large compared to the national average (since the beginning of the epidemic). In a special note sent Monday morning to the bank’s investor clients, the chief economist of the National Bank, Stephane Marion, said.

Moreover, if growth forecasts fall to 2.6% over the next few months, Quebec’s economy will be the only one among the four major provincial economies to grow slower than that measured in 2019, in the last full. An economic year before the pandemic shock in spring 2020.

In 2019, real GDP for the Quebec economy grew by 2.8%, outpacing the 2.0% rate measured in Ontario and the 1.9% rate for the entire Canadian economy, according to data provided by National Bank economists.

After a year marked by a brutal pandemic recession, Quebec’s economy regained positive momentum in recovery last year compared to Ontario and all of Canada.

Pending official year-end statistics, National Bank economists expect growth of nearly 6.2% for Quebec’s real GDP in 2021, compared to 4.0% for Ontario and 4.6% for the entire Canadian economy.

Quebec’s economic growth advantage is very likely to be reversed in the coming months, National economists expect, as a result of the severity of the month-long epidemic health restrictions put in place.

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