TORONTO - Ontario politicians have a grim forecast to consider as they prepare to begin a special debate in the legislature on the provincial economy.
In its latest forecast, the Royal Bank predicts Ontario's economy will show zero growth this year, then grow a paltry 0.5 per cent in 2009.
RBC chief economist Craig Wright says the vortex created by the struggling U.S. economy will be "nearly impossible for Ontario to miss."
He says export demand has soured and Ontario's close economic ties to the United States are now a "ball and chain around Ontario's ankle."
The bank also says Ontario's robust domestic conditions are starting to show cracks, such as a rapid cooling in housing markets.
If negative sentiment continues to spread, says RBC, these cracks could widen and test the resilience of strong sectors like consumer spending.
While Ontario's economy should continue to benefit from public infrastructure programs, low interest rates and fiscal relief at the federal level, says Wright, overall performance is expected to be at its weakest since the recession of the 1990s.
