OTTAWA — The Canadian Chamber of Commerce says the economy will continue to strengthen in the new year, but warns that premature withdrawal of stimulus measures could stall recovery, endanger confidence, and put jobs at risk.
In its annual outlook for 2010, the chamber says the global economy has turned the corner to recovery, but considerable uncertainties remain.
The Canadian economy is projected to grow at an average annual rate of 2.6 per cent in 2010—a fairly modest performance in comparison to previous economic cycles.
The unemployment rate is expected to peak in early 2010 at about 8.8 per cent as previously discouraged workers re-enter the labour force and resume job searches.
The Chamber also says a subdued pace of recovery in the U.S. will weigh on Canadian exports in 2010. But there is scope for continued expansion, supported by domestic demand.
The combination of the high dollar, excess supply, high unemployment and competitive pressure will continue to subdue inflation pressures. Headline inflation is projected to average about 1.6 per cent in 2010 and two per cent in 2011.