OTTAWA, ON (January 9, 2020): The most recent Macdonald-Laurier Institute Leading Economic Indicator (LEI) update reveals that Canada’s trend of slow economic growth is set to continue for the first half of 2020.
“Modest gains in the index point to continued slow growth,” says LEI author and MLI Munk Senior Fellow Philip Cross. “Canadians can expect 2020 to start with a fairly middling economy.”
The LEI, a tool designed to predict changes in the Canadian business cycle, rose by 0.3 percent in November. This marks the seventh consecutive month of growth for the Canadian economy, though the rate of growth has declined from a rate of 0.5 percent observed in October.
Overall, this deceleration in the LEI is a result of slight downturns in housing and consumer sentiment. While the economy is still set to grow slowly, only four of the ten components measured by the LEI have increased, whereas five decreased, and one remained unchanged.
According to Cross, “this slow growth is not just restricted to Canada. Large parts of Europe and Japan have essentially stalled.” However, despite fears that 2020 could be the year that heralds in a new recession, Cross has cautioned that such fears are premature.
“While the economy is not now in recession, inevitably we will experience another slump, more likely sooner than later,” explains Cross. “Clearly there are worrying signs, but Canada seems set for sluggish but consistent economic growth for now.”
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