In response to global financial market turmoil and the impact on oil prices and exchange rates, the Conference Board of Canada has cut its Canadian economic growth forecast for 2009.

The Conference Board now expects Canada’s economy to grow by 1.5% in 2009, down from its previous forecast of 2.2%, largely due to the impacts of a recession in the United States.

“High resource prices have bolstered Canadians’ real income for six years, including 2008. In 2009, this source of strength will evaporate,” said Pedro Antunes, director of the Conference Board’s national and provincial forecast in a statement.

“Still, Canada is expected to skirt a recession in 2009. Although the economy in general is slowing, it is still growing,” he added.

The Conference Board forecasts real GDP growth in the United States to be just 0.5% in 2009. Due to the effect of low consumer confidence, combined with significant losses in wealth following the drop in home prices and stock values, the board projects real U.S. household spending will contract for five consecutive quarters, until late 2009.

IE