Economic growth in the last three months of 2012 will likely come in below the Bank of Canada’s short-term forecast.
“In the very near term, more of the elements of the downside risks have materialized than the upside risks,” BoC Governor Mark Carney told reporters after a speech at Western University’s Ivey School on Business in London, Ont. In other words, there have been more bad than good news lately for Canada’s GDP. (You can watch the presser here.)
The governor’s statement is hardly surprising. After a number of disappointing readings on the economy in the past few weeks — showing sharp declines in housing, retail and factory shipments — GDP numbers, due out on Friday, are widely expected to show growth stalling between October and December.
Still, the governor sought to strike a positive note. The rate at which Canadians are piling on debt is slowing, he said, calling it “an intended and welcome development.” The same, he said, goes for the cooling housing market.
And if exports aren’t showing any signs yet of stepping in to substitute consumer spending as the main engine of Canada’s economic growth, there are some positive signs that business investment might be picking up. “We’re seeing in the very short term an uptake in corporate borrowing,” the governor said. If that keeps up, it should give the economy a lift.