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Economic Viewpoint

In This Time of Uncertainty, Careful Not to Confuse Economic Slowdown with Recession

January 30, 2019
François Dupuis, Vice-President and Chief Economist
Mathieu D’Anjou, Deputy Chief Economist • Hendrix Vachon, Senior Economist

Fears about economic growth have intensified in recent months. After a buoyant 2017 worldwide, the stars fell out of alignment in 2018, particularly in the second half of the year. Clouds have also gathered on the horizon for 2019. The word “recession” even reappeared in some economic commentary. Is this truly something we are in for?

It is always difficult to predict with a high degree of certainty whether or not the economy will contract. We must be cautious in interpreting a slowdown in economic growth. A slowdown does not necessarily lead to a recession, where economic activity retreats and the unemployment rate rises significantly. The difference is important. As things currently stand, it is still likely for the economy to catch its breath without too much trouble.