Canada's Recession is Over

Canada's Recession is Over

 

By Brian Madigan LL.B.

Officially, Canada's recession is over. Canada's economy as measured by its gross domestic product actually grew in the third quarter of 2009.

Now, it only takes two consecutive downward quarters to start a recession, but only one upward quarter to break the trend.

Statistics Canada confirmed the September GDP figure, which showed an increase of 0.4 per cent. For Canada, this was the first quarterly gain since the third quarter of 2008.

Here are the figures:

Third quarter 2009

% change from previous quarter

+0.1

% change annualized

+0.4

% change year-over-year

-3.2

So, all in all, the economy is still down from this time last year. And, the increase was 1/10th of one per cent, which certainly isn't that great an endorsement. If you assume that it will stay the same, then you have 0.4% annually. But, that figure is guesswork. It's just a pure mathematical projection. It didn't really happen.

The United States has already reported a 2.8% increase in GDP in its third quarter.

The Bank of Canada had expected a 2% annualized increase by now, so the economic recovery is somewhat slower than anticipated.

The result is that in all likelihood, interest rates will remain the same, and the Bank of Canada will continue its prime rate at 0.25% until 30 June 2010 as promised.

Brian Madigan LL.B., Broker is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com