Mark Carney speaks in London on December 16, 2019. Kirsty Wigglesworth/The Associated Press
Former central bank governors of Canada and England say the risk of a recession in the United States and globally is “uncomfortably high,” but Canada is likely to fare better than other countries in a recession.
Mark Carney predicted that the severity of any economic malaise that could begin within the next year would not match that triggered by the financial crisis.
“This slowdown, if it does come, will be relatively mild. It’s not 2008 because [the U.S.]But it’s not even 2001 yet,” said Mr. Carney at the Alberta Relaunch 2022 conference in Calgary.
Won’t be as painful as the previous global recession as the US economy doesn’t have the same imbalances. The banks are not in such a precarious position, and there is no equal supply of housing and cars. Meanwhile, consumer finance isn’t as bad as it was in 2008, he said. “People are starting to get fed up, but overall they’re not in debt,” Mr. Carney said.
However, it could surpass the recession that came with the dot-com crash of 2000-2001, when central banks were better placed than they are today to “donate support” to limit the damage. Also, the world was in the process of liberalizing trade at the time, which benefited the situation, he said.
Today, Canada, and Alberta in particular, can benefit from global energy systems in transition to low-carbon sources that can power our economy.
“We’re in a better position than almost any other country,” Carney said. “We are able to leverage what is needed in reselling the energy system and in the energy transition, which is why we need to act quickly so that we can receive the investment and benefit from it immediately.”
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