The world is facing a new depression as the COVID-19 pandemic is expected to weigh heavily on global economic activity, according to economist David Rosenberg.
“I think it’s a global depression,” Rosenberg told BNN Bloomberg in an interview on Monday.
“It depends on what you want to define as a recession or a depression. A recession is a discount to GDP and in a year, who will be talking about a recession? Nobody. But with depression, you’re still going to be talking about it for the next five to ten years. “
Earlier this month, the International Monetary Fund said the COVID-19 pandemic was pushing global economies into a recession, but the real economic impact is unlikely to be fully known for years. Central banks and governments around the world have hastened to mitigate the economic impact of the new coronavirus, including massive unemployment, sharp downturns in manufacturing, and major disruptions to all supply chains.
“If we call ’08 and ’09, the ‘Great Recession’, it’s 10 times worse at any level. How is it just a little recession? Said Rosenberg.
“Depression is something that happens every century, but the definition is that it will bring about a centuries-old change in attitudes in terms of how we live, how we work and how we travel, and the approach to debt and expenses. It’s going to be a lasting impact here. “
Rosenberg’s remarks contradict what the outgoing Governor of the Bank of Canada, Stephen Poloz, told Lisa LaFlamme, CTV National News chief animator in an interview earlier this month, when he said that ‘It would be’ completely inappropriate ‘to describe the current economic situation as a depression. He noted that there was no official bank for Canada when the Great Depression occurred almost a century ago, and policymakers at the time did little to save the country. ‘economy.
“What we have today is all the tools, both with fiscal and monetary policy, fully engaged, precisely because we read the history books,” Poloz told LaFlamme.