Found this on a Chinese news site but here is what was said:
Canada’s economy will grow by 2.2 percent this year, thanks to strong consumer spending, the Conference Board of Canada said Monday.
The prediction stands in contrast with those offered by economists at the major banks, who argue that the slowdown in the U.S. economy will drag the Canadian economy to a slower pace. About 70 percent of Canada’s exports goes to the United States.
Last week, Royal Bank economists said Canada’s GDP will rise by1.6 percent in 2008 as the trade sector slows and the U.S. economy weakens. In mid-March, TD Bank predicted economic growth this year would top out at 1.1 percent.
But Ottawa-based Conference Board of Canada believes that steady consumer confidence, easing interest rates and a stable housing market should help keep Canadians spending, boosting the economy.
It noted that spending by consumers grew by an annualized rate of 7.4 percent in the fourth quarter of last year. Canadians are expected to spend “liberally” this year as well, it said in a report.
In 2007, Canada’s economy grew by 2.7 percent.
I like the banks prediction myself. I think that the conference board may be too optimistic, especially in saying that consumer confidence is steadying, and also saying Canadians will spend liberally. I live in the new “centre of the universe” in Calgary and I can tell you consumer confidence is down, and the housing market year over year is down 35%. I can only imagine how consumers are feeling in other areas of the country.
Let’s add in if the US dollar drops significantly on the Canadian dollar this will have a very adverse effect on the Canadian economy, particularly in Ontario. Canadians will surely spend liberally, those that can, if this should happen but it will be on US goods priced in cheaper US dollars.
Stay tuned this story will continue to develop
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