Canada's economy has sharply deteriorated in the past three months and largely stalled as a result of the worsening credit crunch and the slumping U.S. economy that has robbed manufacturers of their traditional market, the Bank of Canada says.More context:
The assessment in the central bank's quarterly monetary report gives a clearer understanding of what the bank's governing council was weighing Tuesday when it slashed its key interest rate by half a percentage point to three per cent.
After predicting in January that an upturn would begin this quarter, the bank now says Canada has entered an economic flat spot with growth in the current quarter barely above recessionary levels at a 0.3 per cent annualized rate, and won't recover fully until 2010.
The Bank of Canada report attributed much of Canada's near-recession to lagging economies elsewhere, suggesting it may be up to two years before the light at the end of the tunnel in the United States, which has been experiencing a credit crunch since last summer that shows no short-term signs of waning.Doh! Darn autonomous and credible institution...:) Nevertheless, Diamond Jim is still trashing McGuinty, now taking it on an international scale. How helpful to Ontario can this man be?
"The deterioration in economic and financial conditions in the United States will have significant spillover effects globally,'' states the report, listing consequences for Canada including declining exports and costly credit for businesses and banks.
Meanwhile, Diamond Jim wants us all to forget how he and his Conservative party have painted Canada into a tight financial box, despite financial uncertainty around the world. That he's left us precious room to "weather the storm" and is now publicly musing about spending cuts...