The Bank of Canada is declaring the recession essentially over in Canada and projecting the economy will bounce back at least twice as strongly as in the United States.
Canada is coming out of the deepest and most painful downturn since the Second World War
The bank remains concerned that the fragile financial systems in the United States and Europe may contain more unpleasant surprises
But overall, the new outlook represents a clearly more optimistic view of the Canadian economy
growth is now projected to turn positive in the third quarter (of 2009),” the bank now says.
the central bank adds specifics and context to its new outlook, and almost all are favourable to Canada, especially in relation to the United States.
overall view that it will take until mid-2011 for Canada’s economy to return to full capacity.
What is happening, say the economists in the bank’s governing council, is that Canadians are responding to low interest rates and growing confidence by pulling the trigger now on such big-ticket items as houses, cars, furniture and appliances they were planning to purchase later.
The U.S. has stopped shrinking, but is still likely not growing. And Europe may still be in recession, along with Japan. Next year, the U.S. will only rebound by 1.4 per cent, less than half Canada’s rate, and the European area by a mere 0.7 per cent. The strongest engine of growth globally is China
Just as Canadian exports of autos and wood products were hardest hit during the downturn, they will be boosted more than other industries once demand returns in the U.S.