Canada’s GDP growth is expected to drop by 9.4% this year due to pre-existing factors being exacerbated by the devastating economic realities brought on by COVID-19.

A global economic outlook report released Thursday by Export Development Canada (EDC) suggests global GDP growth will fall by 2.8% this year, while Canada’s growth will plummet more than three times that amount. The outlook for developed markets, as a whole, is bleak as well – with the EDC projecting that, collectively, their growth will fall 4.2% in 2020 – though Canada is expected to be hit harder than other OECD countries.

Underlying issues for Canada that existed prior to COVID-19 have compounded matters for the country. Some of these issues include consumer savings not being high, pre-pandemic; and debt-to-income spiking to an all-time-high of 180% – helping to fund a cross country housing bubble. “Investment and trade were faltering, related to uncertainty in future global trade rules, the U.S.-China trade dispute and Brexit,” writes Peter Hall, vice-president and chief economist at the EDC, who authored the report.

Hall adds that Canada’s greater reliance on trade “made us especially vulnerable” to the mass international trade stoppage due to the virus. And with oil prices having plummeted in recent months due to a major drop in demand for energy, “the ravages inflicted on the oil industry have devastated a key Canadian GDP machine,” Hall writes.

While numbers to date show a significant drop in first-quarter output, “the worst is yet to come in the April-June period,” Hall notes.

The report indicates that the accommodation and food services sector, as well as the retail and wholesale trade sector, experienced the most job losses between February and March – approximately 300,000 and 225,000, respectively. The report also suggests that Canadian consumer and business confidence have fallen sharply: on an index of 75, consumer confidence has dropped from 54 to 36 in recent weeks, with business confidence dipping from 59 to 37.

The business confidence index, as defined by the OECD, provides information on future developments, based on opinion surveys on developments in production, orders and stocks of finished goods in the industry sector. Consumer confidence measures how sanguine or pessimistic consumers are about their expected financial situation.

It’s anticipated that trade will continue to drop, according to the EDC. Trade was shrinking prior to COVID-19, the outlook notes, “as trade wars and policy uncertainty were negatively affecting activity.” The latest World Trade Organization forecast for goods trade expects in between a 13% to 32% decline this year.