OTTAWA — An international economic think-tank is declaring Canada still in recession, an assessment that is at odds with the Bank of Canada and most private sector analysts.
The Paris-based Organization for Economic Co-operation and Development says Canada’s economy will continue to shrink in the current quarter at an annualized rate of two per cent, in contrast with the Canadian central bank’s contention that the recession has ended.
In July, the Bank of Canada predicted the current quarter — the July, August September months — will see a 1.3 per cent growth.
Since then, many private sector economists have estimated the short-term rebound could even be stronger at above two per cent annualized.
“I don’t know too many people who think that (the OECD forecast),” said Avery Shenfeld, the chief economist with CIBC World Markets.
“It doesn’t sound current with the data,” pointing out that Statistics Canada said last week the Canadian economy began growing, although only a smidgen, as early as June.
The OECD projection is also far more gloomy about Canada in the fourth quarter as well, putting growth at a minuscule 0.4 per cent, compared to the Bank of Canada’s three per cent growth projection.
The think-tank’s new numbers are actually an improvement from its June estimates, but if correct, it will mean Canada will trail the G7 nations in its recovery, at least this quarter.
The organization offered no analysis about Canada in its report posted Thursday.
However, some economists suggested the OECD may be using older data from earlier this summer that is out of date and might affect the think tank’s growth projection’s for the Canadian economy.