With a global economy now suffering a third recession since the Great Recession of 2008, economists are trying to figure out how much is being lost and what it will cost the economy in the long term.
“The economic downturn of 2008 was not a one-time event,” says Robert Gagnon, a senior economist with the Conference Board of Canada.
“It is likely to have been a protracted process that continues into the 2020s.”
Gagnon says there are still uncertainties about how the global economy will recover from the economic crisis, but he expects that economic activity will recover and that Canadians will return to work.
“In the short term, the economy is probably going to return to a fairly normal trajectory,” Gagnons report says.
“But over the long-term, we do expect the economy to be in an uncertain state.
This is going to be a protracted period of adjustment.”
Gajdak said he expects the economic outlook to improve in the coming years as Canada adjusts to the downturn.
“This is a relatively large, multi-sectoral, multinational economy that employs millions of people across all levels of government, and it is a major player in the global economic system,” he said.
“We are in the midst of a global recovery, but there is a long way to go.”
Gail Tarrant, an economist with Bank of Montreal, says she thinks Canada’s economy will grow again in the next two to three years.
“This will be a period of increased growth,” Tarrants report says, adding that the economy could eventually expand another 10 per cent to 20 per cent annually.
“With a relatively weak job market and low unemployment, it is not clear what the longterm economic impact will be,” Tarpants report said.
“The short-term economic outlook is positive, but it is uncertain at this time.”
The Canadian economy is growing more slowly than in the past because the federal government has taken more time to create jobs than in other countries.
But Gagnont says Canada will rebound as the country adjusts to a downturn.
“When you look at a very broad measure of the Canadian economy, I think the economy has been improving since 2008,” he says.
Gagnons economic model also expects growth to remain sluggish over the next couple of years.
“There is a significant downside risk of a prolonged recession,” Gaguons report said, adding it is possible that “the long-run outlook for the economy will remain uncertain.”
Gaguon says the economic situation will be much more complicated in 2020, as a lot of the uncertainty in the economy stems from uncertainty about how much the economy can recover from its recent economic downturn.
He says the longer the downturn continues, the more difficult it will be to find jobs.
“That is a problem we will have to deal with for a very long time, but in the longer term, there is little doubt that it will continue to be difficult for the Canadian labor market to recover,” Gaglons report concludes.