OTTAWA, Jan. 14 /CNW Telbec/ - The Canadian economy will weather the
storm of uncertainty in the United States, as the Conference Board's Canadian
Outlook - Winter 2008 projects growth in real gross domestic product (GDP) to
accelerate slightly to 2.8 per cent this year.
"As long as the United States averts a recession, Canada's domestic
economy will remain largely impervious to woes afflicting our largest trading
partner," said Pedro Antunes, Director, National and Provincial Forecast.
Canadian domestic demand, which averaged 4.3 per cent growth annually for
four years, is still forecast to expand by more than three per cent in each of
the next two years. Many of the positive conditions that have stimulated
Canada's domestic economy remain in place, such as strong job growth and wage
gains. Furthermore, recent changes, such as tax reductions announced by the
federal government in October 2007, will maintain the momentum.
The outlook for overall corporate profits is bullish for 2008, thanks
largely to high resource prices. Strong profitability, combined with announced
reductions in corporate taxes, appears to have reignited private investment by
The possibility of a U.S. recession poses the greatest downside risk to
the Canadian forecast. Nonetheless, the Conference Board expects the U.S. to
skirt a recession, thanks mostly to continued growth in consumer spending, and
investment spending that has held up well in spite of the turmoil in American
housing and financial markets.
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