Slower economic growth expected
By ebizniz on July 2, 2007 - 9:52am
An article by Vancouver home mortgage:
Vancouver home mortgage is reporting a slower Canadian economic growth for the second half of 2007.
TAVIA GRANT from The Globe and Mail reported on June 29, 2007 a slow down in wholesale trade for March, 2007. The lower growth number at 0.3% is the first time in 10 months, and economists are projecting a lower growth number for April to be at 0.2%.
Inspite of the slower growth in Canada's economy, no one is expecting the long expect interest rate hike by the Bank of Canada to be post-phoned. "Rates may rise by a quarter percentage point on July 10, but the outlook for borrowing costs is fuzzy after that, an economist said".
JULIAN BELTRAME of Canada East Online reported on Thursday June 28th, 2007 "High-flying Canadian dollar helping bring down inflation". With the Canadian dollar at 30 year high at around Cdn $94.00 against the US dollar, economists are projecting a slowing down in Canada's economic growth. Eastern Canada's manufacturing companies are already reporting higher costs and projecting lower revenues from exports to the U.S.A. and overseas due to the high Canadian dollar.
If the growth in Canada's economy continues to slow down, inflation for the next few months may stall. If core inflation falls below the 2.0% target range, the Bank of Canada may ease the need to raise the bank rate after this coming July 10 increase.
Paul Vieira of Financial Post reported on Tuesday, June 05, 2007 "Tourism hit by loonie" high-lighted the impact of higher Canadian dollar to the tourism industry in Canada. While Americans and Europeans are reported to find Canada a less attractive place to visit, more Canadians are spending their money traveling overseas due to the stronger Canadian dollar.
On the housing front, there is still no signs of the US housing market recovering from the present slump and slide in house prices. There is no end in sight on the increasing number of house foreclosures across the U.S.A. There are more problem loans with "option mortgages" on Adjustable Rate Mortgages that are expected to surface when interest rates resets are due this year and in 2008.
As for Canada's housing market, the demand for housing is expected to be moderating. Price gain is forecasted to be at a slower pace for 2007. Housing analysts are bullish on the Canadian housing market, and no one is projecting any housing bubble similar to the US happening in Canada.
However, it has been long established that housing comfortability is a big problem faced by Canadian home owners.
