| TORONTO, April 22
TORONTO, April 22 Canada and the United States
will narrowly avoid a recession in 2008 as the global economy
slows, but the Canadian export sector will contract by 2
percent on shrinking world demand, a government agency said on
Export Development Canada, a government-owned credit
agency, said it expected Canadian exports to fall 2 percent in
2008, hampered by the weaker demand, a still-strong Canadian
dollar, and lower commodity prices.
It sees Canadian growth slowing to 1 percent in 2008, from
2.5 percent in 2007, and rebounding to 2.3 percent in 2009.
"Technically, we avoid recession, but this is as close as
it comes," Peter Hall, the agency's deputy chief economist,
said at a speech in Toronto.
He said the United States will also miss falling into a
recession, defined as two consecutive quarters of negative
growth, but just by "dumb luck."
The agency expects the U.S. economy to grow by 1.3 percent
in 2008 and 1.8 percent in 2009. In 2007, U.S. GDP rose 1.9
It sees global growth at 3.8 percent in both 2008 and 2009,
down from 4.7 percent in 2007, and Hall said that slowing
growth made high commodity prices hard to justify.
The agency predicts base metal prices will tumble 40
percent by the end of the year. It puts oil at $70 a barrel by
year-end, down from current levels of $119.
The lower commodity prices are expected to take some of the
steam out of the Canadian dollar, and the agency expects the
currency to fall to 90 U.S. cents by the end of 2008, from
around 99 U.S. cents at present.
It expects broad-based losses for most Canadian export
sectors, with the exceptions of agri-food, energy, and
fertilizers as well as aircraft and parts.
The full report is available on the EDC website here
(Reporting by John McCrank; editing by Janet Guttsman)