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Consumer spending and housing demand should begin to slow, probably by late summer or early fall, the bank said. But, says Clinkard, unless something is done to ease the high debt burden of governments and individuals, the possibility of an economic downturn cannot be ruled out. "Once growth begins to slow and, ultimately, once inflation starts to abate, a less restrictive policy stance will lead to lower interest rates," Clinkard said in his report. ‘"Provided that the monetary authorities have not been forced to raise interest rates to the point where growth slows sharply, a recession should be avoided in 1990." In a report released, Canadian Imperial Bank of Commerce senior economist John Clinkard said the central bank will continue to tighten monetary policy bringing higher interest rates in the second and possibly into the third quarter of the year. The question on everyone‘s lips as Crow continues his tough high interest rate stand on inflation is: are we heading into recession? The answer, according to two economic sources, is that a recession can be avoided as long as Crow‘s stragtegy doesn‘t bring our economic growth to a screeching halt. Rates for borrowing money, including mortâ€" gage rates, will probably go higher soon, although all five big banks just completed a round of mortgage hikes through the 13% barrier over the past week. The breakthrough of that barrier has already seen many home buyers in the Metro market step to the sidelines to wait for lower rates and many homeowners put their properties on the market. John Crow is back in fighting form. After two weeks of relative inactivity, Crow came out swinging against inflation again, boosting the Bank of Canada rate 22 basis points to 12.40%, up from last week‘s 12.18% setting. Canada‘s big banks, crouched like jungle cats waiting for the kill, pounced on Crow‘s move, and within minutes of the setting, boosted the prime lending rate to 13.50%. There‘s light at the end of our economic tunnel WILLIAM H. WHITE Q.C. ALBERT L. OSTNER JOACHIM D. MATTES ANDRE C. HUENIKEN TRACY L. MILLER 45 Erb Street East Waterloo, Ontario N2J 4B5 (519) 886â€"3340 Fax: (519) 886â€"8651 WHITE, JENKINS, DUNCAN & OSTNER Barristers and Solicitors J. FREDERICK SAGEL WILFRED D. JENKINS, Q.C. HILDE M. ENGLISH DEAN F. EDGELL RICHARD V. MARCHAK Counsel KEITH C. MASTERMAN and TRACY L. MILLER have joined our litigation department are pleased to announce that Vasic said recent figures showing a rising inflation rate reflect a temporary effect caused by higher food and energy prices due to last summer‘s drought and higher world oil prices. ‘"When the central bankers see inflation â€"easing off and slower growth, they‘ll be able to ease off somewhat on interest rates," he said. ‘‘That‘s a soft landing. It‘s what‘s often called a growth recession â€" growth is still positive, but not enough to keep the unemployment rate from rising." But the economic experts believe there is light at the end of the tunnel. John Crow is walking an unenviably fine line. Let‘s hope he‘s sureâ€"footed. Vasic and others also say the massive federal budget deficit, expected to reach $29 billion this year, has also fuelled inflation fears. Vasic said Ottawa could lower the deficit by $6 billion without choking the economy if costs were cut and interest rates dropped 0.5%, This strategy would still allow the economy to grow by about 3% in 1989 and about 1.5% in All of this positive erystal ball gazing may be hard to swallow right now as rates continue to rise and we feel the squeeze. DRI economist George Vasic said yesterday chances are about 60% that Canada will see slower growth in 1989 and 1990 rather than a recession. DRI Canada agrees that while our economy‘s sevenâ€"year growth spurt is petering out, it probably won‘t end in recession. The bank predicts inflation, measured by the Consumer Price Index, will increase by about 5% in 1989 after five years of growing at less than 4.5% per year for the past five years. Gus Carlson Canadian Business IRWIN A. DUNCAN J. DAVID LINTON KIMBERLY L. EVANS KEITH C. MASTERMAN ORANGES, GRAPEFRUIT & PECANS Evenings 7â€"9 p.m. uew Canon â€" ESIO FRESH FLORIDA CITRUS FRUIT While Supplies Last â€" Mon.â€"Sat. 9â€"5; Evenings by Appt. 885â€"3822 Howie Steen ons C B db tod =" + \\:' $ j}f)__’ The Great Annual x : a.. 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