Monday, June 15, 2009
Canada.com reports: "Canada's recession, likely its deepest since the Great Depression, may also be its shortest." I have no idea what this means, as output loss appears to be rather benign compared to previous recessions. Many developed economies are posting their worst recessions in several decades, but Canada's 08-09 recession breaks just a 20-yr record as the worst recession since 1990.
The chart illustrates Canada's four recessions since 1960 defined by the two consecutive quarters of negative GDP growth rule. The point 0 marks the first quarter of negative GDP growth, and the recovery consists of 2 quarters of positive growth following the end of the recession.
The 2008-2009 recession started in Q4 2008 as GDP fell an annualized 3.7% over the quarter (the first quarterly negative growth rate). The Bank of Montreal forecasts that the recession will end one year later in Q4 2009, when GDP grows a small annualized 1.5% (see the forecast here under the drop-down menu at the top of the web page). Compared to 81-83 and 90-91, the 08-09 recession looks more benign.
And as oil goes up, so do Canada's prospects. Furthermore, Canada's housing market seems to be back in business as affordability surges; and Toronto's luxury home market is hot right now (ht reader Stephen Saines).