IO: Canada to avoid RECESSION

[BoMac]

It appears that our harsh winters are confining people to their homes, foregoing any frivolous business trips, thus saving the Canadian economy in the process.

Central bank warns of tough times but no recession


CTV.ca News Staff


The Bank of Canada lowered its growth forecast for the Canadian economy on Thursday but indicated that a recession will be avoided.

In 2008, pressured by a weakening U.S. economy and a tightening of credit conditions in industrialized countries, Canada's gross domestic product is forecasted to only expand by 1.8 per cent.

The bank had previously predicted a growth of 2.3 per cent.

In the first quarter of 2008, growth is expected to only be 0.6 per cent (at annualized rates). But in the second quarter it will grow to 2.0 per cent and in the second half of 2008 it should reach 2.3 per cent.

As a result, a recession -- generally defined as two straight quarters of decline in GDP -- will likely be avoided.

By 2009, the bank, in its Monetary Policy Report Update released Thursday, forecasts that the Canadian economy should expand by 2.8 per cent.

"This growth profile implies that the economy will move into excess supply in the second quarter of this year, and then return to balance in early 2010," Governor David Dodge said in his final press conference before he retires later this month.

The central bank also stated that the United States will narrowly avoid a recession.

Annual U.S. GDP growth is projected to be 1.5 per cent in 2008 and 2.5 per cent in 2009, said the bank.

Export growth

Dodge told reporters that the weakness of the U.S. economy will "lead to additional downward pressure on Canada's export growth."

The bank projects that exports -- mainly delivered to the U.S. -- will shrink in 2008 by 0.1 per cent after having advanced 0.6 per cent in 2007.

Still, Dodge said domestic demand in Canada is expected to remain strong.

On Tuesday, the central bank cut its key rate by one-quarter of a percentage point shortly after the U.S. Federal Reserve slashed its key interest rate.

"Further monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance, and to return inflation to target over the medium term," Dodge said Thursday.

However, Dodge would not say if a half-point cut could be looming in the future.

"What we try to do, and have tried to do over this whole decade, is to move always in a measured fashion related to our medium-term goal of keeping inflation on target,'' said Dodge.

"And that's why we've tended to move over a period of time in relatively small increments, because it gives us a chance then to adjust or adapt to changes which we don't foresee, which come along.''

Meanwhile, core inflation -- which excludes the most unstable prices -- is projected to fall below 1.5 per cent by the middle of 2008 before it returns to 2 per cent by the end of 2009.

"This reflects a price-level adjustment related to increased competitive pressures in the retail sector stemming from the level of the Canadian dollar, as well as the recent reduction in the GST," said Dodge.

"Excluding the impact of the GST reduction, total CPI inflation is projected to average close to the 2 per cent target throughout 2008 and 2009."

With files from The Canadian Press

 

[UberBeaver]

He's cheating.

 

[zonelistener]

The cold weather keeps out the riff-raff that causes recession. You know, like a company that would send employees they are about to terminate on a useless business trip. Yeah, they would never be smart enough to open up shop in Canada !!!

 

[Carek1230]

thanks, mother nature?

 

[anitram]

This is bullshit.

It was only like -19 here this morning.

 

[LMP]

She's like Nostradamus, but hates Spicoli.

 

[phillyfan26]

He's cheating.

 

[No spoken words]

I've said this before, and I'll say it again. The US keeps looking to the Middle East for countries to invade. But, if it were up to me, we'd invade Canada, and we'd do it tomorrow. Enough is enough.

 

[gvox]

Originally quoted by BonoManiac
The central bank also stated that the United States will narrowly avoid a recession.

This in particular fairly leaped off the page at me and sure will let me sleep better tonite knowing that we've saved America, once again!

 

[Canadiens1131]

CANADA FUCK YEAH

 

[gvox]

This bothered me all night. If you 'narrowly avoid' a car crash, it shakes you up pretty badly.

I wonder if Americans are shaken up after their near-miss. Maybe we need a poll.

 

[elevated_u2_fan]

CANADA FUCK YEAH

 

[Bonochick]

Where am I?

 

[BoMac]

Where am I?

CANADA FUCK YEAH

 

[gvox]

 

[iloveedge]

CANADA FUCK YEAH

 

[jobob]

So-ooo, if Detroit -- which really is in a recession -- is south of Canada, and Canada is narrowly avoiding a recession, does that mean Detroit needs to take a business trip to Canada?

 

[~BrightestStar~]

I've said this before, and I'll say it again. The US keeps looking to the Middle East for countries to invade. But, if it were up to me, we'd invade Canada, and we'd do it tomorrow. Enough is enough.

Bring it.


You're all weakened by the RECESSION anyway....you're doomed to phail.

 

[RavenBlue]

My home and native land

Be careful NSW, we have beavers trained with ninja sniper skillz!

 

[No spoken words]

We'd take Winnipeg first, because nobody would really care, or notice. That would be our base of operations.

 

[zonelistener]

SASK

We'd take Winnipeg first, because nobody would really care, or notice. That would be our base of operations.

Houses float in Manitoba!

Let's take Regina after Winnipeg. I like saying Regina.

Rough Riders

 

[anitram]

We'd take Winnipeg first, because nobody would really care, or notice. That would be our base of operations.

Winterpeg is the most dangerous city in Canada, apparently.

You're really better off going with Saskatoon.

 

[No spoken words]

Winterpeg is the most dangerous city in Canada, apparently.

You're really better off going with Saskatoon.

Canadians are so nice, they assist with their own doom!

 

[UberBeaver]

It's like a self fulfilling prophecy, eh?

 

[BoMac]

Well, it appears that more Canadians have taken business trips to Atlanta, Germany than previously predicted.

Canada teetering on brink of recession: BoC

Canada is teetering on the brink of recession, according to the Bank of Canada.


CTV.ca News Staff

Lower exports and unsteady financial markets are leading to a lagging Canadian economy, according to the Bank of Canada's quarterly monetary report.

Thursday's report states that Canada has entered an economic slump with growth only slightly higher than recession levels. The report provides insights to an interest rate cut by the bank earlier this week. On Tuesday, the central bank lowered rates to 3 per cent from 3.5 per cent.

"In order to achieve the inflation target over the medium term, additional monetary stimulus will be required," said bank governor Mark Carney during a Thursday news conference, adding Canadians should expect more interest rate cuts in the future.

The report said the Bank of Canada would likely cut rates one more time this year.

The central bank had initially predicted an economic upswing this quarter but now says Canada won't see a growing economy until the second half of the year, when the growth rate is predicted to average 1.8 per cent.

Thursday's report noted that Central Canada's manufacturers -- and the export sector -- will be especially hard hit as the U.S. economy takes a dip.

TD Bank's Chief Economist Don Drummond painted an even bleaker picture of Canada's financial future Thursday, saying he believes the market won't do as well as the Bank of Canada's low predictions.

"I think the Bank of Canada is positively cheery compared to how I feel," he said on CTV Newsnet. "But I don't think we're looking at a recession like (those of) the early 1980s or early 1990s."

The TD Bank's Deputy Chief Economist Craig Alexander told CTV Newsnet late Thursday afternoon, the bank believes Canada's economic growth next year will be under two per cent.

"We think a weakness in the U.S. economy is going to be relatively protracted. The housing market is likely to remain very weak. The financial market conditions are only gradually going to recover," said Alexander.

"I think the important thing for most Canadians is that it isn't going to feel terribly bad. I think what you're going to find is that economic growth in Western Canada remains quite solid. I think the weakness in the Canadian economy is going to be more in Central Canada and parts of Atlantic Canada."

Alexander said Canadians may see some job losses in the manufacturing sector, but "overall unemployment is likely to remain very low."

Harper responds

In Quebec, Prime Minister Stephen Harper admitted that Canada faces "uncertain economic times."

But he told the chamber of commerce in Laval, north of Montreal, that the country's strong economic fundamentals will help Canada weather the storm.

Canadian Auto Workers Union President Buzz Hargrove told CTV's Mike Duffy Live that Ottawa needs to step in and help the country's manufacturing sector.

"(Stephen Harper) is saying 'the market will take care of all this.' Boy, we need direct intervention here to ensure we don't continue to lose these jobs," Hargrove said.

Hargrove praised Carney's steps to cut interest rates since taking over the Bank of Canada earlier this year.

"But we have to cut deeper. We have to lower the value of the dollar. We can't let the commodities drive our dollar and put our manufacturing sector, including the auto sector, out of business. That makes no sense for Canada," he said.

The Bank of Canada report attributed much of Canada's near-recession to lagging economies elsewhere, suggesting it may be up to two years before the light at the end of the tunnel in the United States, which has been experiencing a credit crunch since last summer that shows no short-term signs of waning.

"The deterioration in economic and financial conditions in the United States will have significant spillover effects globally,'' states the report, listing consequences for Canada including declining exports and costly credit for businesses and banks.

While the credit crunch is having less of an impact in Canada as is other countries, it is still taking a toll. The bank's report said businesses and consumers can expect to pay about three-quarters of a percentage point above normal borrowing rates.

Conditions are expected to return to normal by 2010.

With files from The Canadian Press

 

[edurban]

I want to be Canadian. I said this two weeks ago out of the blue, well, not really out of the blue, I was pointing out that I wanted to change nationality and for some strange reason I said that I wanted to be Canadian. Mr ed looked at me like I was mad. Turns out I was right.

 

[elevated_u2_fan]

Mr ed looked at me like I was mad. Turns out I was right.

Well, that means you would pass the first partt of the entry exam... How do you look in a toque?

 

[gvox]

I want to be Canadian.

You are mad. Hence, you shall be Canadian.

But only if you root for the Habs. You root for the Leafs and you'll be deported before you can say 'medium double double and an everything bagel with butter and cheddar'.

 

[Angela Harlem]

Canadians and their rooting

 

[blueeyedgirl]