Recession in Canada Is Over, Economists Say
Canada’s yearlong recession, which withered profits, swelled the ranks of the unemployed and caused record bankruptcies, was declared over by economists Friday after a report that the economy rebounded strongly in April.
The larger-than-expected 0.9% rise in gross domestic product, the biggest monthly rise in three years, was broadly based in goods and services industries, Statistics Canada said. The rise followed flat growth in March.
“The recovery is definitely here,” said Mike Manford, chief economist at ScotiaMcLeod Inc. “The recession is over.”
Exports, mainly to the economically recovering United States, are expected to fuel Canada’s rebound for a while.
ScotiaMcLeod forecasts that the economy will grow by 3.5% to 4% during the next 12 months. In the first quarter of this year, the economy shrank 4.6% on an annualized basis.
Canada sank into recession in April, 1990, after interest rates about 5 percentage points higher than in the United States were raised to tame inflation but quashed consumer and business spending.
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