Economists now see year-long recession
“The boom has turned to bust.”
Sherry CooperThe Canadian economy is likely already in recession and may remain in the doldrums for a year, an increasing number of economists now believe.
Economists at the Bank of Montreal became the latest in a growing group saying they believe the economy has already shrunk or is poised to shrink based on the deepening slump in manufacturing and reduced global demand for Canada’s commodities.
“The boom has turned to bust,” BMO chief economist Sherry Cooper wrote in a note to clients about tumbling commodity prices.
“Canada, too, is headed for recession and our government will awaken to the need for deficit spending. Our recession will be milder than in the U.S. and other countries with housing bubbles, but we should expect challenges through much of 2009.”
In a separate report, the Bank of Nova Scotia also predicted Canada’s economy would contract by 0.2 per cent in 2009.
Also yesterday, a panel of 10 Canadian economists sponsored by the C.D. Howe Institute agreed the situation is grave.
