Laurentian Bank Predicts Modest Economic Growth for Canada in 2009

(The Canadian Press)

Laurentian Bank of Canada predicts economic growth of just 0.5% in Canada next year. The Montreal-based bank released its economic outlook on Tuesday, saying the Canadian economy will be hampered by both the global economic slowdown and the recession in the U.S. The bank notes a troubled economy south of the border will weaken trade with Canada’s largest partner.

Laurentian says imports, exports, home construction and business investment will all be hit by the slowdown and bank interest rates will remain low.

It also predicts unemployment will rise next year, but says the extent of job losses won’t be known until the fate of the financially-troubled big three automakers is resolved.

Laurentian says the Canadian dollar will likely trade on average between 80 and 85 cents U.S. in 2009.

“The Canadian economy in 2009 will face challenges far more demanding than those in previous years,” said the statement, written by Laurentian Bank economists Carlos Leitao and Sebastien Lavoie. “The financial crisis impeding economies worldwide since the last quarter of 2008, coupled with a major economic slowdown, will have a growing impact over the year on Canada’s economic environment.”