Canada’s third quarter “miserable”: Bank of Canada - MoneySense

Canada’s third quarter “miserable”: Bank of Canada

A global currency war and the spectre of a housing bust is keeping growth at bay.


The Bank of Canada reports that the third quarter is shaping up to be the country’s worst since the onset of the recession, with a global currency war and possible housing market collapse threatening to derail the economic recovery.

The bank’s latest quarterly outlook estimates the Canadian economy grew a miniscule 1.6% during the third quarter, compared to that of the troubled U.S. economy, which is estimated to have grown by 2.3%. The BoC now expects growth of 3% this year and 2.3% for 2011.

It also warns that household debt is dangerously high and could present a problem should the bottom fall out of the housing market. However, low interest rates and improving business investing are presently acting as a counter-balance for the economy, and the bank believes the economy will return to good health in two years time.