Not too long ago, Canada was the envy of the post-recession world.
Remember the quick-out-of-gate economic recovery, and all those lost jobs that were recouped in its wake? Well, not anymore. The outlook for Canada’s economy this year “can best be described as humdrum,” says the Conference Board of Canada.
Glen Hodgson, the board’s senior vice-president and chief economist, said in a new report, “The unusually cold winter got economic growth to a slow start this year, but that’s not all that is ailing the Canadian economy. Overall, the domestic economy remains lethargic,” he added. “The business sector seems to be holding back on hiring and investment, governments are by and large in restraint mode, and households are seeing their purchasing power erode.”
The economy has left central bankers in both Canada and the United biding their time, waiting for stronger and broader activity to appear before raising their long-dormant benchmark lending rates, regardless of a recent surge in American job creation and a lower unemployment rate.
The Bank of Canada has left its key rate at a near-record-low 1% since September 2010, while the U.S. Federal Reserve’s lending benchmark has been in zero-to-0.25% range since December 2008. Most economists anticipate policymakers in both countries will make their first rate move around mid-2015.
The Canadian economy “should improve next year when stronger U.S. growth helps to boost hiring and investment here at home,” the Conference Board’s Mr. Hodgson said in Tuesday’s report.
Original article from: http://business.financialpost.com
