The Bank of Canada warned the eurozone is headed for a recession.
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Πέμπτη 27 Οκτωβρίου 2011
Bank of Canada sees ‘brief recession’ for eurozone
BY GORDON ISFELD, POSTMEDIA NEWS OCTOBER 26, 2011
The Bank of Canada left its key interest rate on hold Tuesday, as expected, and warned the eurozone is headed for a “brief recession” as the global economy continues to slow “markedly.”
Canada’s economy has weakened as a result, and the central bank said it expects growth to slow through mid-2012, easing the threat of inflation.
“The combination of ongoing deleveraging by banks and
household, increased fiscal austerity and declining business and consumer confidence is expected to restrain growth across the advanced economies,” the bank said in a statement.
It said “the euro area – where these dynamics are most acute – will experience a brief recession,” adding the region’s debt crisis “will be contained, although this assumption is clearly subject to downside risks.”
The Bank of Canada’s decision the leave its benchmark lending rate at a near-record low one per cent comes as European leaders are set to approve measures Wednesday in Brussels to contain a debt crisis that has brought Greece to the brink of default and could also threaten European banks.
The crisis will also be addressed at a critical Group of 20 leaders meeting next month in France.
In Canada, despite a surprise jump in the inflation rate in September, the central bank said it still expects consumer prices to ease in the coming months and into next year.
The bank says Canada’s economy will expand by 2.1 per cent this year, down from its previous forecasts of 2.8 per cent. The growth outlook for 2012 was downgraded to 1.9 per cent from 2.6 per cent, while the 2013 forecast was raised to 2.9 per cent from 2.1 per cent.
“The combination of ongoing deleveraging by banks and
household, increased fiscal austerity and declining business and consumer confidence is expected to restrain growth across the advanced economies,” the bank said in a statement.
It said “the euro area – where these dynamics are most acute – will experience a brief recession,” adding the region’s debt crisis “will be contained, although this assumption is clearly subject to downside risks.”
The Bank of Canada’s decision the leave its benchmark lending rate at a near-record low one per cent comes as European leaders are set to approve measures Wednesday in Brussels to contain a debt crisis that has brought Greece to the brink of default and could also threaten European banks.
The crisis will also be addressed at a critical Group of 20 leaders meeting next month in France.
In Canada, despite a surprise jump in the inflation rate in September, the central bank said it still expects consumer prices to ease in the coming months and into next year.
The bank says Canada’s economy will expand by 2.1 per cent this year, down from its previous forecasts of 2.8 per cent. The growth outlook for 2012 was downgraded to 1.9 per cent from 2.6 per cent, while the 2013 forecast was raised to 2.9 per cent from 2.1 per cent.
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