Canadian economy will avoid recession: Conference Board

The financial turmoil weighing down the U.S. economy will limit Canadian economic growth to 0.8 per cent this year but Canada will avoid a recession, according to the Conference Board of Canada.

In its autumn outlook on the world economy released Friday, the Ottawa-based economic research group said weak growth in Canada's economy will last through 2009.

The forecast is in line with a Bank of Canada report released Thursday, which sees sluggish growth continuing until 2010.

The Conference Board said global growth is expected to fall to 2.8 per cent this year and 2.4 per cent in 2009. The U.S., which avoided a recession in the first two quarters of 2008 because of strong exports, is sinking into recession because of a slump in consumer spending.

The U.S. will see gross domestic product grow by just 0.5 per cent in 2009, the board forecast.

"With GDP growth stalled in the United Kingdom, Germany and France, the economic outlook for Europe is pessimistic," it said.

"Japan is likely to slip into recession, but most other Asia-Pacific economies are expected to avoid recessions."

Even China, which saw its economy grow by 12 per cent in 2007, has lost momentum lately due to a slowdown in export growth, the board said. GDP growth is expected to slip into single digits in 2008 and 2009.