Canada Is Well-Placed To Withstand A U.S. Slump

It may not be an easy year but with inflation quiescent, governments rich enough to open the fiscal floodgates, and most importantly, the consumer in robust health, Canada is well-placed to withstand a U.S. slump. In an indication of just what this country has going for it, the same investment bank that said on Monday the United States was already in recession, predicted on Wednesday Canada would pull through with "the best relative performance ... in modern times." David Wolf, Merrill Lynch's Canadian analyst forecast Canadian real GDP would trough at 1.3% year-over-year in the third quarter, down from 2.9% in the fourth quarter of 2007 and a nearby peak of 3.6% in the first quarter of 2006. In the 2001 U.S. recession by contrast, Canadian growth fell to just 0.7% from the cyclical peak of 5.9% in the fourth quarter of 1999. And history has been much less kind, with Canada suffering interminably during the early 1990s recession as the U.S. economy bounced back. ... http://www.financialpost.com/story.html?id=226393

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