Tax Cuts Lead to Robust Consumer Spending for PEI, Says BMO Economics

    CHARLOTTETOWN, Feb. 15 /CNW/ - Although consumer spending will slow in
2008, it will continue to be one of the bright spots for PEI, helping to
offset sluggish manufacturing activity, according to a provincial economics
outlook released today by BMO Financial Group.
    "Housing starts are tracking below levels from a year ago, but consumer
activity is robust, helped by personal income tax cuts," said Doug Porter,
Deputy Chief Economist, BMO Capital Markets. Mr. Porter added that a strong
loonie should put a damper on tourism as Canadians increasingly head south of
the border.

    Highlights of the report include:

    -   GDP growth should slow to 1.5 per cent this year and then rise to
        1.9 per cent in 2009.
    -   Housing starts are expected to total 1,200 over the next two years.
    -   Unemployment rate expected to increase slightly to 10.4 per cent in
        2008 and 10.7 per cent in 2009.
    -   Reflecting an increase in capital investment and borrowing on behalf
        of Crown corporations, total borrowing requirements are forecast to
        be $171 million.

    The complete report can be found at

For further information:

For further information: Lucie Gosselin,, (514)
877-8224, Internet:

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