"The weaker outlook for global demand will
increase the drag on the Canadian economy coming from exports. Lower
commodity prices will also dampen the outlook, working through a
deterioration in Canada's terms of trade to moderate domestic demand
growth. The marked tightening in Canadian credit conditions in recent
weeks will restrain business and housing investment. The Bank expects
growth to be sluggish through the first quarter of next year, then to
pick up over the rest of 2009 and to accelerate to above-potential
growth in 2010 supported by improving credit conditions, the lagged
effects of monetary policy actions and stronger global growth. The
recent sizeable depreciation of the Canadian dollar will also provide
an important offset to the effects of weaker global demand and lower
commodity prices. Overall, the Bank projects average annual growth in
real GDP of 0.6 per cent in both 2008 and 2009.