Canadian Manufacturing

European crisis will cost Canada’s economy $10 billion in 2012: BoC

The Bank of Canada says domestic and world economies are paying a heavy price for Europe's unresolved debt crisis.

OTTAWA—The Bank of Canada says both the domestic and world economies are already paying a heavy price for Europe’s unresolved debt crisis.

The central bank expects the impact hold back the Canadian economy’s growth by about 0.6 per cent this year, equivalent to about $10 billion.

The bank says debt crisis will directly affect trade, as well as have indirect spillovers into financial conditions, confidence and lower commodity prices.

But the international economy will suffer even more acutely, losing more than one per cent of economic output.

The bank announced Tuesday that Canada’s economy will likely grow by two per cent in 2012.

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