Home Breadcrumb caret Economy Breadcrumb caret Economic Indicators RBC forecasts recession amid coronavirus and plunge in oil prices Canada’s economy will contract in Q2 and Q3, the bank says By The Canadian Press | March 13, 2020 | Last updated on March 13, 2020 1 min read © picsfive / 123RF Stock Photo Royal Bank is predicting Canada will fall into a recession later this year as the economy is weighed down by the impact of Covid-19 and the plunge in oil prices. The bank is predicting Canada’s economy will grow at an annualized pace of 0.8% in the first quarter, but then contract in the second and third quarters of the year. RBC is forecasting an annualized decline of 2.5% in the second quarter and 0.8% in the third quarter. Its forecast is based on an assumption that the impact of the virus will run its course by the end of the first half of the year, but an economic recovery will be prevented by persistent low oil prices. RBC expects the economy will pick up in the fourth quarter. The Bank of Canada cut its key interest target by half a percentage point last week in response to the Covid-19 outbreak. The Canadian Press The Canadian Press is a national news agency headquartered in Toronto and founded in 1917. Save Stroke 1 Print Group 8 Share LI logo