Canada to see growth no higher than 2.2% until 2010

by Richard Kilner

Story link: Canada to see growth no higher than 2.2% until 2010

Warren Jestin, the Bank of Nova Scotia’s chief economist, has warned that Canada is unlikely to see growth rates exceeding 2.2% for the next two years.

Jestin went on to say that both production and the creation of jobs would suffer in the first six months of this year, laying the blame for the slowdown on low consumer confidence and the tighter lending conditions brought about by the credit crunch.

Canada would also be affected by the declining housing markets apparent in the US, UK and elsewhere, Jestin added.

Although Canada’s housing market has robust fundamentals it would nevertheless see lower momentum in inflation terms in the near future.

Across the border, the US Federal Reserve is predicted to continue rate cutting throughout the year, with the chairman Ben Bernanke hinting at a 0.5% cut at the Reserve’s forthcoming meeting.

By contrast the Canadian dollar is expected to remain strong over the course of the year.

Jestin believes that 2008 will again see the emerging economies of the world, such as China and India, outperforming more established nations such as Canada and the US.