Looking Bleak For The Canadian Economy

25 June 2012 13:30 - Phoebe Robinson

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Looking Bleak For The Canadian Economy

The outlook for the Canadian economy is not looking too bright according to private sector forecasts. They have said that they see the economy struggling to maintain sufficient pace in the two years ahead. They say the country is held back by weak job growth and vulnerable to both external and internal shocks. The CIBC have said that Canadians will be able to take advantage of historically low interest rates in 2014.

However adding to this report it was said that in fact the bank of Canada does not need to be too worried about households continuing to pile on debt as a result of generous loan conditions.

The two reports from CIBC and Capital Economics have both predicted that the Canadian economy will register the lowest annual growth rate since the recession in the coming two years. It looks like the growth will average 2.1 per cent in both 2012 and 2013 some even say that it will be slower predicting 2.0 per cent in 2012 and 1.5 per cent in 2013.

“This is not a good recovery,” said economist Benjamin Tal of CIBC. “Normally you would expect growth rates of four and five per cent in a recovery, but I don’t see anything that will lift the economy in any significant way.”

Since the recovery began in the autumn of 2009 the economy was maintained by a couple of factors like very low interests rates that spurred consumer spending and house buying. But this time things are different the consumer will not be tricked by low rates and the government is pulling back, exerting a drag on gross domestic product where once they were stimulating growth. 

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Related Links:
• CIBC
Offical website
• Capital Economics
Offical Website

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