I’m submitting the title of this post for the understatement of the year award. The United States of America is the worlds largest economy and Canada’s largest trading partner. With recent US job data not looking so hot, problems in the credit market and a housing slump that has left vacant eyesore properties in the hands of banks, 2008 is not looking like a really great year for the US economy.
Bank of Canada governer David Dodge commented earlier today on the potential fallout for the Canadian economy:
â€œThe downside risks to Canada from slower U.S. growth in the first half of 2008 are probably greater than we estimated in October,â€ he told reporters on the sidelines of a meeting of the Bank for International Settlements in Basel, Switzerland.
The big question is how bad those downside risks turn out to be. If the US enters a recession (or is already in one) will Canada be able to avoid the same fate? What sectors of the economy are likely to thrive, where will we hurt and what happens to our super-hot housing market? It’s shaping up to be an interesting year.