IMF cuts Canada 2013 Growth Forecast
The Washington D.C.-based fund said Canadian gross domestic product will probably expand 1.6% this year--the same pace as the U.S.--a bit down from its July prediction of 1.7%.
Despite ultra low interest rates and deficit spending, the Canadian economy is running just above stall speed at 1.6%.
If one deducts the amount of deficit spending (1.0% of the total), an economic stimulant, as a percentage of GDP from the headline number the results are more revealing - the real economy is only growing at 0.6%.
So where does this leave us, five years into the so called "recovery"?
If the only way the Canadian economy can grow (albeit very slowly) is through near zero interest rates and large amounts of deficit spending, our economic health is precarious indeed.
It appears that any significant increase in interest rates would derail this very modest recovery and lead to more bond buying by central banks to help the "recovery".
Such a fragile economic environment is highly vulnerable to an external shock, in my view, and then back into recession we go.