The global economy has slowed markedly as several downside risks to the projection outlined in the Bank's July Monetary Policy Report (MPR) have been realized.
The Bank now expects that the euro area-where these dynamics are most acute-will experience a brief recession.
In the United States, diminished household confidence, tighter financial conditions and increased fiscal drag are expected to result in weak real GDP growth through the first half of 2012, before growth strengthens gradually thereafter.
Growth in China and other emerging-market economies is projected to moderate to a more sustainable pace in response to weaker external demand and the lagged effects of past policy tightening.
Although Canadian growth rebounded in the third quarter with the unwinding of temporary factors, underlying economic momentum has slowed and is expected to remain modest through the middle of next year.
Net exports are expected to remain a source of weakness, owing to sluggish foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.
Overall, the Bank expects that growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases.
The Bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2 per cent inflation target over the medium term.
Overall, one general consensus is that the global economy is undergoing the growing pains of a very slow recovery. Sort of like potholes along an 8 lane highway, it's advisable to proceed slowly and with caution for the unexpected.I recognize the words you are saying but not together in a sentence like that....
So, for those of us who do not follow such things (let's pretend that's me)
Is this a good thing or a bad thing?
I agree with you.At a basic level, the rate not going up is a good thing for anyone with variable mortgages, or looking to buy soon.
Lending costs is a large part of the real estate market, but increasingly so in the GVRD is demand and affordability.It is also good for the real estate market, which gains or loses activity/momentum depending on lending costs.
Time to invest in fish!However, the rates not going up is a bad thing for anyone who is lucky enough to have money in savings.