Fears of recession in 2019 are overblown – BoC's Poloz

by Ephraim Vecina on 20 Dec 2018

Amid oil price declines and uncertainty brought about by cross-border trade wars, Bank of Canada governor Stephen Poloz assured that fears of a recession-induced housing meltdown next year are a tad exaggerated, considering Canada’s robust fundamentals.

However, while a 2019 recession might be unlikely, Canadians should brace for some volatility, although this shouldn’t prove to be crisis-inducing.

“We are in a volatile world and so there are risks ... but I think the Canadian economy begins this new year in a pretty good place,” Poloz told CTV News earlier this week.

Read more: Crash still unlikely despite slowing credit growth

Even the U.S.-China trade spats, cited by multiple observers as an international risk, might have a weaker-than-expected effect on Canada’s overall strength.

“Right now everybody is talking about the gloom scenario, but we’ve seen signs of optimism in recent weeks that they are making progress behind the scenes, and if they do resolve all of that, well, that’ll be a source of brand new lift to the global economy, and I think then we can see this expansion continue on for quite some time.”

Among the economy’s sources of robustness are 40-year lows in unemployment numbers, along with an “on target” inflation rate.

“The picture’s much better than we were in say, two or three years ago.”

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