Economist sees Canadian turnaround

TORONTO, June 15 (UPI) -- RBC Economics said the Canadian economy was poised to contract by 2.4 percent in 2009, but that the worst of the recession was over.

Much of the annual decline would be slanted toward a first quarter gross domestic decline of 5.4 percent. At this point, however, "we believe it (the economy) is ripe to enter its recovery phase later this year," RBC Chief Economist and Senior Vice-President Craig Wright said in a statement.

Wright said "the benefits of significant fiscal and monetary policy stimulus are starting to have traction."

RBC said low interest rates on loans is beginning to jump start the ailing U.S. housing market, giving consumers more confidence.

"There is an unprecedented amount of money bolstering the world economy," he said. "What we will be watching is the impact this spending has on labor markets, as well as household and business confidence."

RBC said a boost in Canadian consumer confidence "will be constrained by increasing job losses."

In Canada, the unemployment rate is expected to reach 9.2 percent. The country has shed 360,000 jobs since October.

The U.S. unemployment rate reached 9.4 percent at the end of May on the loss of about 6 million jobs since the recession began in December 2007.