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BC headed for recession: TD economist

An economist who last week predicted a recession in British Columbia next year is getting ready to revise his forecast downward.

“We've all been reassessing our numbers on a frequent basis these days,” said Derek Burleton, a TD Bank vice-president on the phone from Toronto. “You will be seeing numbers chasing the downward direction.”

Burleton is one of 12 people on B.C.'s Economic Forecast Council, a body that provides advice to finance minister Colin Hansen to help with fiscal planning for the provincial government. On average the council members predicted growth of 0.6 percent in 2009, according to a Dec. 5 update, but Burleton said the provincial economy will shrink by 0.2 percent.

B.C. will do better than some other jurisdictions and recent employment figures were surprisingly steady, he said. But with the U.S. in recession, Asia slowing and Alberta likely to drop by two percent next year, the province will follow. “I don't think anyone's immune anymore.”

The TD Bank's updated forecast will be out by the end of the week, he said.

Another forecast council member, the chief economist for the Central 1 Credit Union, Helmut Pastrick, is predicting zero percent growth for 2009. “At my zero number, that's for the entire year,” he said. “Even in my number it could entail a negative quarter or two . . . It's possible we'll have a quarter or two of contraction.”

It will be easier to tell in hindsight whether the province has gone into recession, he said. “Either way '09 is going to be one of the poorest years we've had in quite a while, probably since 2001, for the B.C. economy.”

The Economic Forecast Council, on average, anticipated a bounce back to 2.7 percent growth in 2010.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.

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