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Recession Over in Canada

July 31, 2009

According to the Bank of Canada, the country is out of the woods.

An improvement in the credit markets and renewed consumer confidence mark the end of hard times, the central bank said in its monetary last policy report.

On Thursday, bank governor Mark Carney said “the rate of growth will pick up to the end of the year and into 2010.”

The Bank of Canada’s latest forecast puts economic growth at 1.3% for the current quarter ending Sept. 30, followed by a strong 3% increase for the last three months of 2009.In its previous forecast in April, Canada’s top bank had predicted the economy would shrink1% in the current three-month period.

Douglas Porter, deputy chief economist at BMO commented “I think it is astonishing how quickly the economy turned to the good”. He added “It is there in black and white”.A business survey last week showed 61% of respondents expected stronger sales in the coming 12 months. That was up from 30% from three months earlier.

According to Carney, Canada is seeing recovery largely due to the government and central bank interventions at the beginning of the crisis.”It is early days, and it is a long road,” Carney said. “But things are unfolding as we broadly expected them to — a little faster in terms of some of the recovery of confidence in financial conditions.”. Carney warned jobs would lag behind. Between October and June, Canada has lost 454,000 jobs, pushing the unemployment rate to 8.6%.

Porter said unemployment will remain high some time.”One of the last things to turn around is employment,” he said. This is mainly due to the labour market waiting “to make sure the recovery is for real.”

Thanks to www.montrealgazette.com for quotes used in this article.

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