Is Canada In The Verge Of Recession?
GoodStorageLeeds is a business in the United Kingdom that specializes in giving storage services to clients. This industry in the UK is reported to be doing well as well as the overall economy of the United Kingdom.
However, if you look to the west, Canada is reported to be inching towards a recession period. This report surfaced after its economy posted a contraction for the last five months.
Statistics in Canada revealed that by the end of July, the Canadian economy has shrunk by at least .2 percent on a yearly basis. This pushed speculators to conclude that the country is edging to a recessionary territory during the first half of this year.
According to a chief economist, there is no really sugar coating in the data this time. He further said that it is a disappointing and sour result. This poor performance has caught economists off guard as most of them were predicting that the country’s GDP would remain flat but it showed instead a contraction in the first quarter by .6 percent. The economy of Canada may or may not really have dipped technically into some form of recession this year (as defined by two quarters of consecutive negative gross domestic product growth)- but this result is surely alarming and needs to be dealt with seriously.
Attempts to rebound
The central bank of Canada slashed its interest rates last July to .5 percent which is the second cut within the year. This slashing of the interest rate may not be enough though to boost the economy of the country. With Canada’s rates already at some very low points, there will come a time when the interest rates will have diminishing returns. The consumer confidence in Canada has already been reported to be at its two year low.
Other factors contributing to this downtrend is the fear factor over a housing bubble in major cities like Vancouver and Toronto. In the last three to five years, the performance of the housing market in these key areas has been rising and people have been hot on the trail. However, this now leaves a great fear for people in that supply is said to be increasing while demand decreasing.