CIBC World Markets said Wednesday the Canadian economy will post the weakest growth numbers in the second quarter of 2011 since the recession, but it’s only a bump in the road.
“The train hasn’t come completely off the rails, but the global economy has seen some serious braking action in the first half of 2011,” said Avery Shenfeld, chief economist at CIBC.
Shenfeld expects the major developed economies of the world to publish weak growth statistics in the coming months.
In Canada, which has enjoyed somewhat of an economic rebound since the Great Recession, Shenfeld said high gas prices, debt and thrifty consumer practices will curb growth for Canadian economy in the second quarter.
CIBC is expecting Canadian real GDP to grow 1% in the second quarter, but rebound during the remainder of 2011 and result in annualized growth of 2.7%.
“After a second half bounce, we expect Canada’s growth rate to settle back,” he said.
Still, tougher economic conditions in Canada mean this country’s economy has more riding on the success of the U.S. economy, Shenfeld added.
Fortunately, private sector hiring in the U.S. has been “robust”, Shenfeld said, providing hope for an improvement in that country’s economy.
Given the economic conditions in Canada, Shenfeld has pushed back his prediction for a Bank of Canada interest rate hike to October instead of September.
Joel McKay
Twitter:jmckaybiv