Canada’s central bank says the current recession will be deep and painful but relatively short-lived.
The Bank of Canada’s first detailed economic analysis this year shows three-quarters of contraction in Canada, beginning last fall and continuing until mid-2009. The January-March quarter retreat will be particularly pronounced, with a 4.8 per cent annualized rate of decline.
But in a break with many private-sector economists, bank governor Mark Carney says Canada will start bouncing back as early as July, grow strongly next year at a 3.8 per cent clip and return to full capacity in mid-2011. “When recoveries come, they come sharply,” he said.
Canada’s recovery will be quicker than previous recessions in 1981-82 and 1990-92 and stronger than other G7 countries because of the relative health of the economy, Carney said.