Thursday 22 February 2018

Blow for Irish emigrants as Canada heads into a recession

Cities such as Toronto have proved a magnet for Irish workers
Cities such as Toronto have proved a magnet for Irish workers
Colm Kelpie

Colm Kelpie

Canada and Australia, two popular destinations for tens of thousands of Irish emigrants during the crisis years, are seeing economic growth soften.

In fact, the Canadian economy has entered a modest recession for the first time since the financial crisis, after it shrank again between April and June.

The recession may be short-lived, however, as growth picked up for the first time in six months in June.

The Australian economy experienced the slowest economic growth in two years in the second quarter, with gross domestic product virtually stagnant having grown by just 0.2pc in the second quarter, down from 0.9pc in the first three months of the year.

However, year-on-year, the picture looks healthier, as GDP increased 2.3pc.

The Australian Bureau of Statistics said GDP expanded by 0.2pc in the second quarter, down from a solid 0.9pc the previous quarter. That was the slowest quarterly pace since the first three months of 2013.

The closely-watched measure of real net national disposable income fell 0.7pc in the year to June.

"A lot of it appears to be statistical payback. Nevertheless, smooth out the last few quarters and it looks like we're running at somewhere around a 2.3pc annual rate so it's a soft outcome whichever way you cut it," said Michael Blythe, chief economist at Commonwealth Bank.

In the case of Canada, the confirmation of a modest recession will figure heavily into the election campaign as Canadians head to the polls next month and poses a challenge to Conservative Prime Minister Stephen Harper, who is seeking a rare fourth consecutive term.

Harper was quick to downplay what some supporters and economists have dismissed as a "technical" recession, pointing to the upbeat June figures during a campaign stop.

"The Canadian economy is back on track," he said.

But politicians from the opposition New Democrats and Liberals said the numbers were evidence Harper's economic policies were failing.

Economists mostly agreed the 0.5pc pickup in June put Canada on good footing for a better third quarter.

"Despite the technical recession materializing, it does look like the Canadian economy is jumping back, is rebounding strongly in the third quarter," said Derek Burleton, deputy chief economist at Toronto-Dominion Bank.

The Canadian dollar initially rallied to a session high against the greenback following the data before giving up ground later in the day as oil prices fell.

Earlier this year, the Sunday Independent reported that almost 5,000 Irish emigrants have permanently settled in Canada since the beginning of the recession.

Over the past six years around 3,200 Irish nationals have become permanent residents of the North American country, while more than 1,500 have become Canadian citizens.

(Additional reporting Reuters)

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