Economic growth slowed in 2nd quarter: Bank of Canada

We’re not out of the woods just yet.

Canadian economic growth slowed sharply in the second quarter of 2010 due to softer household spending and a decline in the real estate market, according to a July 22 report issued by the Bank of Canada.

In its latest economic forecast, Canada’s central bank forecast a U.S. economy that won’t expand as quickly as originally anticipated and would perform below the expectations of the U.S. Federal Reserve. Meanwhile, Europe’s debt crisis would take a combined four-tenths of a per cent from Canada’s GDP growth this year and next, the central bank estimated.

“The pace of real GDP growth is expected to moderate through the remainder of this year and into 2011,” said the central bank in its monetary policy report. “The accelerated global fiscal consolidation, and the weaker and more uncertain global outlook imply a slightly more pronounced deceleration in economic growth in Canada than previously expected.”