OTTAWA, Jan. 31 /CNW Telbec/ - The economic slowdown in the United States
will weaken growth in the world economy from 3.8 per cent in 2006 to 3.2 per
cent in 2007, according to the Conference Board's World Outlook - Winter 2007.
"The health of the U.S. economy casts a long shadow over global growth,"
said Kip Beckman, Principal Research Associate. "A sharper-than-expected
decline in the U.S. dollar would hurt countries that rely on the U.S. market
for their exports, such as Canada, Mexico and those in the Asia-Pacific
The United States is facing tumbling home sales nationally and falling
prices in some parts of the country, as well as weaker vehicle and retail
sales and orders of durable goods. The Conference Board's U.S. Outlook -
Winter 2007 forecasts that the U.S. economy will have a soft landing, although
the odds of a hard landing have increased somewhat over the past 12 months.
The United States is expected to avoid slipping into a recession because a
weaker U.S. dollar will boost American exports and business investment will
remain strong, leading to economic growth of 2.2 per cent in 2007.
After performing relatively well in 2006, economies in western Europe and
Japan will weaken in 2007, dragging down global growth. Europe's real gross
domestic product (GDP) is expected to grow by two per cent in 2007, but tax
increases in Germany and a stronger euro will negatively affect the short-term
outlook. The slowdown in the United States will affect the Asia-Pacific region
by slowing Asian exports and weakening real GDP growth from the 5.3 per cent
recorded in 2006 to 4.6 per cent in 2007.
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