TORONTO - A new forecast from RBC Economics says Ontario's economy is likely to contract by 0.2 per cent this year and a further 1.4 per cent in 2009.
The bank says that contraction would represent the worst economic performance in the province since the recession of the early 1990s.
The report notes that strength in Ontario's economy is diminishing as consumer and business sentiment sours.
RBC also says Ontario's job prospects are quickly deteriorating and 2009 could bring a decline in employment for the first time since 1992.
Ontario's jobless rate is forecast to climb to an average of 8.3 per cent next year as retail sales and demand for housing slow even further.
The bank says by 2010, Ontario should benefit from strengthening U.S. demand as stimulus measures move the U.S. economy into a recovery.
