Recession not in Canada`s Future

[Jack]

The financial turmoil in the US will limit Canadian economic growth to 0.8% this year but Canada will avoid a recession, says the Conference Board of Canada. In its latest outlook on the world economy, the Ottawa-based economic research group said Friday that weak growth will last through 2009 as Canada, Europe and Asia buckle under the weight of the worst financial crisis in half a century in the US. The Conference Board predicts global growth will fall to 2.8% this year and 2.4% in 2009. The US, which earlier avoided a recession because of strong exports, is sinking into recession because of weak consumer spending. "A number of developed countries are close to recession, and given the current state of financial markets, weak economic growth is expected to last through 2009," said Kip Beckman, the board`s principal research associate. "Developing countries such as China and India have picked up the slack ... although they, too, are now being affected by the global slowdown." Canada`s been hurt by manufacturing losses in Ontario and Quebec and the pullback in resource industries due to falling prices. The board survey backs up a Bank of Canada assessment that the economy will tread water this year and next, with negligible growth, before stronger expansion in 2010.

(Toronto Star, Globe and Mail 081025)