It's official: Canada is in recession

January 20, 2009

It's official: Canada is in recession

After months of denial, the Bank of Canada has finally admitted that Canada has entered into a period of recession.

"Major advanced economies, including Canada's, are now in recession and emerging-market economies are increasingly affected," reads today's release from the BoC. It continues:

Canadian exports are down sharply, and domestic demand is shrinking as a result of declines in real income, household wealth, and consumer and business confidence. Canada's economy is projected to contract through mid-2009, with real GDP dropping by 1.2 per cent this year on an annual average basis. As policy actions begin to take hold in Canada and globally, and with support from the past depreciation of the Canadian dollar, real GDP is expected to rebound, growing by 3.8 per cent in 2010.

A Scotiabank analyst called the projected rebound by 2010 "overly optimistic."

Image by Paul Wicks.