TD raises possibility of Canadian recession
Posted August 24, 2011 12:21 pm.
This article is more than 5 years old.
The strength of the Canadian economic recovery was cast in doubt by TD Bank as it raised the possibility the country could slip into recession if the U.S. economy shrinks.
The bank says it expects the U.S. economy to narrowly avoid a recession in the coming quarters, but if it’s wrong that could spell trouble for Canada.
TD estimated zero growth for Canada in the second quarter, but said there was a reasonable chance the economy actually contracted.
TD said that if the U.S. economy contracts, the chances that Canada will follow suit are high.
A recession occurs when an economy shrinks for two straight quarters.
The new economic outlook calls for the Canadian economy to grow 2.3 per cent for 2011, down from a June forecast of 2.8 per cent.
TD also cut its expectations for 2012 to growth of two per cent compared with an previous estimate of 2.5 per cent.
