Bank of Canada cautious on economic growth

“Canada’s economy has been performing ever so slightly above its weight, providing, for now, a glimmer of hope that sustainable growth may finally be taking hold. But there could still be storm clouds gathering in Europe, emerging markets and, more recently, Ukraine that pose major threats to our growth and, possibly, to our financial stability. The biggest unknown, according to a major Canadian think-tank, is whether the recent eurozone recovery will have legs or be cut down by another ‘perfect storm'”, writes Gordon Isfeld for the Financial Post. Isfeld continues,”‘The eurozone area is not out of the woods yet,’ the C.D. Howe Institute said in a report Wednesday. In fact, the report’s author, Pierre Siklos, argues that ‘an economic downturn or financial shock there cannot be ruled out.’ ‘The effect of setbacks in the eurozone on Canada’s economy could be significant,’ warns Mr. Siklos, a professor at Wilfrid Laurier University’s School of Business and Economics. ‘Clearly, U.S. shocks dominate, but eurozone shocks cannot be ignored. Under eurozone worst-case scenarios, such as a credit-related shock on the scale of the Greek experience, Canada’s economy would suffer a substantial drop of almost 8% in real GDP after two and a half years.'” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS  

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