Canadian Outlook Economic Forecast: Winter 2009
This quarterly economic forecast provides highlights of the Canadian Outlook report, which presents the short-term national outlook.
Executive Summary by
Pedro Antunes
The Conference Board of Canada, 16 pages, January 2009
Document Highlights:
- Hammered by losses in real estate and equity holdings, and further hindered by the lack of credit, households in the United States will cut back sharply on spending in 2009.
- The U.S.-led global recession is having profound impacts on our trade sector—and this, coupled with faltering domestic demand, will drag the economy into recession in 2009. Starting in the fourth quarter of 2008, Canada’s economy is expected to contract for three consecutive quarters, resulting in a 0.5 per cent decline in real GDP this year.
- Fiscal stimulus is assumed to provide some relief, both in the U.S. and Canada, although the details are still to be determined. However, it will be difficult for governments to bolster spending quickly, especially if infrastructure programs are targeted.
- Rock-bottom lending rates and massive liquidity injections have seemingly stabilized financial markets. However, credit is still difficult to obtain, especially for “Main Street” U.S. businesses and households.
- Cliff-diving commodity prices and bruised business confidence will result in a decline in Canadian business investment and employment this year.
- The Canadian dollar is forecast to remain relatively stable vis-à-vis the greenback, averaging 83.5 cents U.S. in 2009.
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