mr.x
Jan 22, 2009, 6:25 PM
BoC predicts recession will be painful, but short
Bank of Canada sees return to economic growth in late-2009
Updated Thu. Jan. 22 2009 11:58 AM ET
CTV.ca News Staff
The Bank of Canada is predicting that the current recession, though harsh in nature, will be relatively short in duration.
The central bank said Thursday that it looks like Canada's economy will start seeing a recovery by the end of the year, after seeing some contraction during the first half.
In its most recent Monetary Policy Report, the Bank of Canada describes how the global economy has "deteriorated significantly" since the fall seeing "all major advanced economies" become tangled in recession.
In response, central banks started cutting their monetary policy rates and governments created stimulus packages to tackle the recessionary problems they faced. These "extraordinary measure taken by central banks and governments are starting to gain traction," the bank said.
As a result, the "Canadian economy is expected to recover in the second half of 2009 and to grow above potential in 2010, as policy actions begin to take hold, both in Canada and globally," the bank said.
It predicts that the Canadian economy will grow by almost four per cent in 2010.
Bank of Canada Governor Mark Carney spoke to reporters in Ottawa on Thursday morning to discuss the outlook put forward in the Monetary Policy Report.
The bank governor said "it will take some time" for Canadians to see conditions return to normal in their economy.
"In Canada, our exports are down sharply and domestic demand is shrinking as a result of declines in real incomes, household wealth and confidence," he said.
"Canada's economy is projected to contract through mid-2009 with real GDP dropping by 1.2 per cent on an average annual basis."
In the second-half of 2009, Canadians should see their economy gradually returning "to potential," he said.
The bank governor said the bank expects this recession will not last as long as the recession seen in the 1990s for several reasons, including the fact that Canada is in better overall financial health than it was at that time.
Bank of Canada sees return to economic growth in late-2009
Updated Thu. Jan. 22 2009 11:58 AM ET
CTV.ca News Staff
The Bank of Canada is predicting that the current recession, though harsh in nature, will be relatively short in duration.
The central bank said Thursday that it looks like Canada's economy will start seeing a recovery by the end of the year, after seeing some contraction during the first half.
In its most recent Monetary Policy Report, the Bank of Canada describes how the global economy has "deteriorated significantly" since the fall seeing "all major advanced economies" become tangled in recession.
In response, central banks started cutting their monetary policy rates and governments created stimulus packages to tackle the recessionary problems they faced. These "extraordinary measure taken by central banks and governments are starting to gain traction," the bank said.
As a result, the "Canadian economy is expected to recover in the second half of 2009 and to grow above potential in 2010, as policy actions begin to take hold, both in Canada and globally," the bank said.
It predicts that the Canadian economy will grow by almost four per cent in 2010.
Bank of Canada Governor Mark Carney spoke to reporters in Ottawa on Thursday morning to discuss the outlook put forward in the Monetary Policy Report.
The bank governor said "it will take some time" for Canadians to see conditions return to normal in their economy.
"In Canada, our exports are down sharply and domestic demand is shrinking as a result of declines in real incomes, household wealth and confidence," he said.
"Canada's economy is projected to contract through mid-2009 with real GDP dropping by 1.2 per cent on an average annual basis."
In the second-half of 2009, Canadians should see their economy gradually returning "to potential," he said.
The bank governor said the bank expects this recession will not last as long as the recession seen in the 1990s for several reasons, including the fact that Canada is in better overall financial health than it was at that time.