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r>~./~ ¶'Vri~yç~h~4 t~qvA ~~biJ ~ rrr~ip-dIcnrrR -rn'rvr s WIUTBV VRRI! PRR~ Oe~L rQ YAM ,YAUa~!U4'J~W ~ 3~$Y~L YUTrRW r~J JD1..'I WM VVP- PRA.WIRD1NEDAY. MAY9299M. PAGE Ecnoieoutlooknot avorabl utn ecession forecas By*Mike Kowaigkl Altbough Canadians can expect an economic slowdown, the country is not heading into a reces sion, predicts a Royal Bank of Canada economist. Interest rates ýand unempl1y ment levels wiIl rise in 199 says.-economist Mark Chandler, but the economy will continue to grow,'aibeit at a much slower rate._ CITI -a- nutahell, the economy has- been. gettinag long in the tooth. ,We've_ had a good seven years but we see problems on th e horizon," said Chandler. Chadler's assessment of (a nada'o - ecoomîc future was made piior to a bank-sponsored seminar for local business people in Os3hawa last week. Hie and other ]Royal Bank offi- ciais were on hand for their twice-yearly economie presen- tation te bank clienits. "Làast fali we said the economy was vulnerable now we're seeing it,» said, Chandfer. Wh'ile fot predicting an econo- mie -sbzmp similiar te the reces- sion which plagued Canada in 1981-82, Chandler did admit the countrywas.expriencing a «growt h rcsion. "Real outpu& goes up but un- )mployment goes paWel s9MdChandler. pas el, The bank is predicting Canada's productivity rate, te GDP (Gross Domestic Product) te, increase by only 0.9 per cent this year and 1.5 per cent in 1991. The there will be an increase in the unemployment rate fromn the current 7.6 per cent te 8.5 p er cent owing te continuing igh interest rates. F or the remainder of 1990, the bank expects interest rates te remain stable at 13.85 percent. Inflation wil run at 4.8 per cent but ini 1991, dut te, the &oods and services tax (GST) it will go up te 5.5 per cent.. Especialy vulnerable and of major concern te Durham Region will be the effect of high interest rates on the manufacturing sector, said Chandler. "Thats the interest rate sensit- ive sector of the economy. -Any weakness will be concentrated in the industrial secter,» said Chan- dler. Since automobile -sales are expected te, remaifiat, about 990,000 units projected te be sold ini Canada, Chandler said any growth in, Durhaxn's economy must corne from the service sec- tern "Mhe auto sector is not falling apart, it's just not at the sanie pace as before,» said Chandler. With «positive developments7 such as extension of GO train service te Bowmanville and the planned widening of Higbway 401, Chandler said the prospects for service secter growth look good in Durham. New people moving inte the frego will mean jobs in such 1ie9d as real estate, banking, retail and commercial said Chan- Ver. However, a ýdrop'in new bous. ing starts does not bode well for Durbami, said Chandler. In Ontario bousin g starts are forecast te o iefrom 93,337 units in 1989 te 81,500 in 1990 and 74,000 units in 1991. House prices are expected to drop from five to, 10 per cent in tbe greater Toronto arça. But extension of GO service te Bowmanville may cushion the Town of Newcastle from the blow. "lrices should go up Mi Bow- manville because of the GO train'» said Chandler. "Look at Whiýtfw as an xml thwa it went u tbere." ' h a For tgose already owning bornes but coming upfor mort gage renewal, Chandler recom- mends a three-year term. Uncertainty over the effect of tbe GBT on the economy means anyting lese tban tbree years is rik, said Chandler. UlJnle you're a risk-lover, you should renew at tbree p~rars, rates should be lower then. Chandler also commented on a number of other topies pertain- ing te the economy: GST:.«Personally I feel it's a valid tax. The reai probleni is people tbink it's a regressive tax, if that's the case then the way te, fi it ýup are tax credits at the lower icorne levels.' Wage and price controls: "Most economists . agree they don't work, there are always hiecui- ties. The best'teol te figbt infla- tion is interest rates." Canada's deficit: «The govern- ment bas te continue restraining its expencitures. It may bave te, look at cutting some of its sacred cows (social progranis) te, achieve it.» Fre trade: «Ites one reason wby business investment in Caqnadahbasnot fallen iapart.» Handgfuns stolen from Oshawa store Durham Regional- Police are investigating the, theft of a large quantity of" frearms fror a spriggodestore in Osbawa. pmrangLng from 22 calibre te, 357' mffgnms, were taken during the early morning bours of May 6, at Gagnons Sports, 818 Simcoe St. S. To date, inventory bas revealed that 85 handguns were taken. It is unknown at this time if any ammunition or rifles were taken, as the inventory is not complete. 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