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Based on household spending and business activity trends, Toronto-based Scotiabank says that its projections for domestic growth have “improved markedly from the forecasts made at the peak of the pandemic earlier this year.”

In a Thursday report by chief economist Jean-François Perrault, the bank’s forecast for 2020 real GDP growth was -5.7%. For 2021, that’s expected to improve to 4.8%.

While that compares to global real GDP forecasts of -3.9%  for 2020 and 5.6% for 2021, the report said, the bank now expects “a more rapid and substantial rebound than earlier anticipated” for Canada.

Yet, “Risks remain tilted to the downside,” the report said, noting that there’s “real economic damage” and that recent equity gains are concentrated rather than broad.

Making predictions at this stage is tough, the report added, because “there simply is too much uncertainty over the evolution of the virus and what measures may be put in place to deal with a rebound in the virus.”

Throughout the rest of 2020 and heading into next year, the bank will be watching when and how lockdown measures are pulled back as well as inflation impacts and labour trends.

The report suggests that weak areas for Canada will be imports, exports and business investment, with those areas weighing on GDP growth the most.

One thing’s for sure, the report said: central banks “will, at a minimum, keep policy as stimulative as it is now for many quarters,” until it’s clear how economies transform.