Slowdown in Canada Brings Even Odds of Recession Next Year

Most forecasters expect that growth in Canada will accelerate during the next few quarters. But a more sobering view comes from Montreal-based economist Peter Berezin at BCA Research.
by Peter Hadekal
Financial Sense
A slowdown is on the way and there’s a 50-50 chance of recession in Canada by the middle of next year, argues Berezin, managing editor of the monthly newsletter The Bank Credit Analyst.
Growth is likely to falter as the housing bubble deflates and as investment spending slows, especially in the natural resource sector.
If that happens, the Bank of Canada would have limited recourse to stimulate the economy with easier monetary policy since interest rates are already near historic lows.
In these circumstances, the Canadian dollar is likely to weaken during the next year while Canadian stocks are likely to underperform.
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