[LINK] "Canada in recession: OECD"

[rfmcdonald]

The Toronto Star carries Julian Beltrame's Associated Press article, it with the unsurprising news.

Canada has fallen into a recession that will last for most of next year as the world falls into the worst slump in a quarter of a century, says a respected international think-tank.

The Organization for Economic Co-operation and Development says Canada will not be immune from the global malaise, the worst since the deep recession of the early 1980s, and will see its economy shrink by an average 0.5 per cent next year.

That is by far the worst of any projection for the Canadian economy by any official or quasi-official body, although some private-sector economists have previously put the country into deficit territory. The OECD is an international think tank representing 30 of the world's most advanced economies.

The body says as an exporting nation, Canada is being sideswiped by the global financial crisis and economic slowdown and will experience a downturn in most economic indicators next year.

It predicts unemployment will rise above seven per cent from the current 6.2 per cent and that federal and provincial governments will record an accumulated deficit of 1.3 per cent of gross domestic product.

"Sharply deteriorating conditions in global financial markets, generalized softness in the U.S. economy and receding commodity prices are amplifying export weakness and dragging down domestic spending," the think-tank says.

"The general government is expected to move into deficit in 2009 and 2010, a largely cyclical outcome that is not alarming and leaves room to absorb eventualities but underlines the need to keep a lid on discretionary expenditure increases."

The report predicts private consumption will fall 0.6 per cent next year.

[. . .]

Although the OECD says Canada is in better shape than many countries confronting the downturn, the average 0.5 per cent contraction in 2009 is in line with than the 30-country average of 0.4 per cent.

The U.S. will be among the worst affected, with a gross domestic product contraction of 0.9 per cent next year, while the 15-member euro zone will shrink by an average 0.6 per cent.