The economic fallout from the recent terrorist attack in the U.S. will be significant, but it will not drive either Canada or the United States into full-blown recession, according to a special report released by the Conference Board of Canada last week.
“It is with great reluctance that we turn to the task of attempting to measure the economic fallout from this attack,” said Paul Darby, director of economic forecasting for the board.
“The terrorist attack on the World Trade Center in New York, and on the Pentagon in Washington, D.C., caused an enormous loss of life. The senselessness of the act and the dimensions of the tragedy are difficult to fathom.”
The board’s report said the sectors most adversely affected include transportation, tourism and financial services.
It predicted that real GDP growth in Canada will be lowered by about 0.4 per cent at annual rates in the last half of 2001, leading to virtually no growth in the third and fourth quarters of this year.
In the U.S., the third quarter will see a decline in real GDP growth and the fourth quarter will return a small positive growth rate, said the report. The board warned that this was only an initial assessment, as many of the facts needed for a more in-depth analysis were not yet available.
