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That`s it, folks. The recession is over. The Bank of Canada said on Thursday that it expects the economy to grow at an annualized rate of 1.3 per cent in the current quarter, which would make the depth and duration of the 2009 recession less severe than most — and unremarkable apart from its global breadth and the credit crunch that accompanied it.
It turned out not to be on the magnitude of the Great Depression, sounding the death knell of capitalism, but rather a cyclical contraction that resembled 1991 rather than 1933. In fact, the first-quarter decline in real GDP was not as steep as the BoC had forecast, households did not cut spending as much as expected, and imports did not throw the balance of payments out of whack to the extent foreseen.
Since the downturn in the first half trimmed GDP by only 5.4 per cent instead of the 7.3 per cent the central bank predicted in its April outlook, it has moved up its forecast for the resumption of economic growth from the fourth quarter to the third. This year is still a write-off, of course, with an annual drop of 2.3 per cent; but growth should reach 3.0 per cent in 2010 and 3.5 per cent in 2011.
The picture for British Columbia is a little gloomier. But even so, the Business Council of B.C. predicts a 2.4-per-cent rebound in real GDP next year, led by modest gains in exports, housing starts, employment and retail sales. (Nationally, retail sales were up 1.2 per cent over the depressed April figures.) And speaking of retail sales, the B.C. government`s move to harmonize the provincial sales tax with the goods and services tax, effective next July 1, should have a positive influence on B.C.`s economy as the recovery picks up momentum.
Read the full article here.
It turned out not to be on the magnitude of the Great Depression, sounding the death knell of capitalism, but rather a cyclical contraction that resembled 1991 rather than 1933. In fact, the first-quarter decline in real GDP was not as steep as the BoC had forecast, households did not cut spending as much as expected, and imports did not throw the balance of payments out of whack to the extent foreseen.
Since the downturn in the first half trimmed GDP by only 5.4 per cent instead of the 7.3 per cent the central bank predicted in its April outlook, it has moved up its forecast for the resumption of economic growth from the fourth quarter to the third. This year is still a write-off, of course, with an annual drop of 2.3 per cent; but growth should reach 3.0 per cent in 2010 and 3.5 per cent in 2011.
The picture for British Columbia is a little gloomier. But even so, the Business Council of B.C. predicts a 2.4-per-cent rebound in real GDP next year, led by modest gains in exports, housing starts, employment and retail sales. (Nationally, retail sales were up 1.2 per cent over the depressed April figures.) And speaking of retail sales, the B.C. government`s move to harmonize the provincial sales tax with the goods and services tax, effective next July 1, should have a positive influence on B.C.`s economy as the recovery picks up momentum.
Read the full article here.