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Canadian Business, et al. - Canadian economic growth will likely slow as U.S. cuts spending, say economists
Published: 27 July 2011
Canada likely faces slower economic growth even if the United States manages to avoid default on its debt or a credit rating downgrade, economists said Wednesday. The U.S. government's need to cut spending by between US$2 trillion and US$4 trillion over a decade would delay its recovery and drag down Canada's rebound because the two economies are so closely linked.
"The short-run effect of these changes is going to be to slow the recovery even further," says Christopher Ragan, an associate economics professor at º«¹úÂãÎè University. "But at the same time they need to put themselves onto a fiscal track that is credible and show they are not going to be hitting the debt wall."