Monday, January 23, 2012

Carney: U.S. May Never Fully Recover

Mark Carney, the illustrious and well-respected Bank of Canada governor said in in interview that the U.S. economy may never return to its glory days, and could take years to recover from its current state.

"The nature of the U.S. recovery, it's going to take a number of years before they get back to the U.S. that we used to know,"
"In fact, they are not in our opinion ultimately going to get back fully to the U.S. we used to know."

According to Carney, the weakness south of the border is costing the Canadian economy $30B annually in lost exports,

The Bank of Canada is also predicting a 0.6% drop in the Canadian economy, about $10B from the European economic crisis. However, Mr. Carney says consumer spending and business investment will prevent Canada from sliding backwards. These two sectors "will be key" in countering the slowdown outside Canada and government austerity measures at home.

"We see (growth) coming from the household sector, consumption continuing to grow around two per cent, more activity in housing than we previously had thought,"

"And then, importantly … is business investment still growing at a solid pace."

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