Canada's economy will remain in a recession for three quarters and contract 0.5 percent in 2009, with the unemployment rate peaking at 8.1 percent, the Conference Board of Canada predicted in a report released in Ottawa on Wednesday. Canadian export volumes have been falling since late 2007 as the global economy slowed. But until recently, the Canadian economy was protected from the slowdown by high commodity prices. “What is new—and perhaps more devastating—is the impact that lower commodity prices will have on real income in Canada, especially when combined with the effect of waning consumer and investor confidence,” the private research group said in its outlook for the Canadian economy. Canada's gross domestic product (GDP) was forecast to shrink by 0.9 percent in the fourth quarter of 2008, followed by contractions of 0.5 percent and 0.1 percent in the first and second quarters of this year. The group expects U.S. export markets hitting bottom this year, before starting to recover in the second half of the year, with the Canadian economy recording a strong 3.6 percent growth rate in 2010. Canada sends three-quarters of its exports to the United States, and weak U.S. demand combined with falling oil prices lowered Canadian exports by 7 percent in November.
