MNI BRIEF: Carney Sees Canada Following World Into Recession

Former Bank of Canada Governor Mark Carney said Thursday his country is likely to follow other major economies into a recession as interest rates rise, using a word current officials have been reluctant to use to describe the slowdown.

“Recession is both likely globally” and “probable in Canada,” Carney told the Senate banking committee. China is “effectively in recession,” Europe is entering one and the U.S. will likely be in recession next year, Carney said. “It will be hard for us, just those cumulative factors for Canada, to be a full exception.”

Inflation in Canada is more domestically generated and that pressures the BOC, Carney said. “The Governor has been clear that more will be required,” he said. “The combination of all of that is likely to lead to a recession,” adding the downturn “is a storm not a hurricane.” (See: MNI INTERVIEW: BOC To Follow Through Even If Recession- Tombe)