Reuters: Household debt overhang holding back Canada's economy


mentalfloss
#1
Household debt overhang holding back Canada's economy

(Reuters) - Canada's economy will grow only modestly over the next two years and underperform the United States as high household debt levels and a cooling housing market restrain consumer spending, a Reuters poll found.

Economists lowered their forecast for annualized growth in the first quarter of this year to 1.7 percent from 2.2 percent in January's poll. Forecasts for the remaining quarters of this year and the first half of next year were nearly unchanged.

"We don't have much potential on the domestic side, at least in the near term, to move our economy at a rapid rate owing to elevated household debt and a cooling housing market," said Sal Guatieri, senior economist at BMO Capital Markets. Continued...


...more...

Household debt overhang holding back Canada's economy | Business | Reuters (external - login to view)
 
Locutus
+1 / -2
#2  Top Rated Post
been thru this before. learn to budget. stay within your means. quit buying useless sh!t and don't live the champagne lifestyle on a beer budget. nothing to do with harper, cons, hitler or me.
 
petros
+1
#3
Oops was to be a green +1


There reason Canadians have so much household debt is climate change.
 
captain morgan
Bloc Québécois
#4
Quote: Originally Posted by LocutusView Post

been thru this before. learn to budget. stay within your means. quit buying useless sh!t and don't live the champagne lifestyle on a beer budget. nothing to do with harper, cons, hitler or me.


I guess that some folks can't get by without the nanny state to tell them when to take a dump or decide that they are tired and should sleep
 
petros
#5
Quote: Originally Posted by captain morganView Post

I guess that some folks can't get by without the nanny state to tell them when to take a dump or decide that they are tired and should sleep

As mentioned in that other thread giving up a morning take out coffee is enough to get you rich.....if you want to that is.
 
Locutus
+1
#6
as they like to say (to scare you into whatever drivel they're selling)...'in these uncertain times'

they're all uncertain you clowns.

Quote: Originally Posted by petrosView Post

Oops was to be a green +1


'not to worry' (to use another idiot phrase these days)...it happens
 
mentalfloss
#7
Oh here come the nanny state people.

That is the epitome of a sheeple cop out.
 
captain morgan
Bloc Québécois
+1
#8
Quote: Originally Posted by mentalflossView Post

Oh here come the nanny state people.

That is the epitome of a sheeple cop out.

What do you mean 'here it comes'?

You're demanding that they take you by the hand and guide you through life.
 
mentalfloss
#9
Quote: Originally Posted by captain morganView Post

What do you mean 'here it comes'?

You're demanding that they take you by the hand and guide you through life.


I didn't demand anything, so thank you for proving my point.
 
darkbeaver
Republican
#10
Well if debt holding householders are holding back the Canadian economy it must be very weak. What a load of sh it. They just can't say recession.
 
Locutus
#11
'keeping up with the liberals'
 
mentalfloss
#12
Housing correction could devastate Canada's economy: BMO

OTTAWA -- A sudden and sharp correction in the housing market could have a devastating impact on the Canadian economy overall, enough to trigger another recession, says a new Bank of Montreal report.

The analysis by senior economist Sal Guatieri finds that even a 10 per cent correction -- what many would call a soft landing -- could sap as much as one percentage point from gross domestic product growth, or basically halve the current growth rate.

The findings stems from an analysis on the contribution of the brisk housing market on the Canadian economy between 2002 and 2007, when prices rose five percentage points faster than incomes.

According to the BMO, the rapid escalation in home prices and construction added 0.56 percentage points to annual growth during those six years, and "lifted household wealth, confidence and borrowing ability."

But now, with home values at or near record levels throughout the country and many economists predicting some kind of correction, the opposite scenario would unfold from a price and accompanying construction drop.

"This suggests a moderate correction could have a meaningful slowing effect," Guatieri says in a report issued Friday.

"Based on our model, a 10 per cent decline in prices and construction reduced annual growth by one percentage point, with the two channels contributing equally. Given underlying growth of just over two per cent, prices and construction would need to fall more than 20 per cent to spur a contraction."

Guatieri adds that given the record levels of household debt accumulated by families, the negative impact of a correction could even be worse than the bank's models project.
On Wednesday, Bank of Canada governor Stephen Poloz said while a housing correction remains a risk to the economy, the most likely outcome was for a "soft landing."
The central bank took comfort in the fact price increases had moderated and that household debt levels had stabilized -- while remaining elevated -- at 164 per cent of disposable income.

Housing correction could devastate Canada's economy: BMO | CTV News (external - login to view)
 
MHz
#13
So Canada's growth under no sanctions is about the same as Russia under sanctions. The solution is obvious for Alberta, annex Montana.
 

Similar Threads

10
Canadians carry most household debt in G20
by wulfie68 | Jul 12th, 2010
no new posts