VIDEO: Economics and coronavirus: 'Don't panic'

UBCO Economics Professor Julien Picault said the best way to look at the economy right now is with patience.

"It's not the moment to panic," he told KelownaNow when asked about how the coronavirus is affecting the economy.

Picault notes with the crisis centred in China the initial impact for the economy is affecting the supply side of the equation, which makes it different than many economic disruptions we have seen over the years.

"Bringing some products on the market becomes a problem for some companies," he explained, "especially those that are located in China right now."

The lowering of lending rates by the U-S Federal Reserve and the Bank of Canada is an effort to "get ahead" of the natural reaction by consumers to spend less in situations like this, but Picault questions whether it will have the desired result.

"The only problem some economists have with that right now is that usually, that is how we respond to a demand problem, so people reduce how much they consume" he observed. "Here the problem is slightly different because it comes from companies not supplying as much, so we're not as sure that it will be as effective as we would like."

Picault is making no bold predictions about where the crisis will take the economy from here.

"It's very, very hard to predict what will happen," he said. "Most economists will probably think that a recession is coming, how severe? Will, it even come to Canada, or a place like Kelowna it's very hard to see and predict right now."

But he admits, it's going to be difficult.

"For sure, it's not good news, we see already stock markets going down quite a bit and we are affected by that already."

On that note, his advice is reassuring. "It's not the moment to panic, don't sell all your assets right now," he cautioned. "Patience in these crises is usually the good thing to do."

And he followed that remark with another nugget of positivity.

"In a few weeks, a few months from now, things will go back to normal," he predicted, "and very likely the economy will come back to a more normal state."