The economic outlook The global economy is in the midst of a major synchronized recession. The Bank expects that growth will resume later this year but that the recovery internationally and in Canada will be more muted than normal. In part, this reflects the need to correct a series of imbalances across and within major economies.
The recovery will initially owe much to monetary policy, which has been very aggressive, and to fiscal policy, which is beginning to have an impact. The effects of monetary and fiscal policy will reach full force in 2010. Self-sustaining demand in most economic areas is not yet imminent. It appears likely that the global economy is entering a period of lower potential growth.