The future of the Canadian economy
The Canadian economy has been acknowledged as well adjusted for this crisis. A sound financial system, fast property market recovery, solid social and health care networks, abundant natural resources - all these factors were supposed to make recession short and not very painful. It’s is still, nonetheless, hazy what the future will hold.
We can hardly come across so many contrasting ideas on the future state of the Canadian economy, than during this autumn. Some professionals think that the Canadian economy is too good to be true, despite the winding down of the recession in OECD countries, whilst other professionals accept the recovery.
The regions overall economic performance was expected to show a 2% growth in the third quarter, unfortunately the 0.1% seen in August was a disappointment. The genuine development seen in most industries, have grown due to direct stimulus action. The Bank of Canada is estimating a 3.3% development in quarter 4 after the letdown of quarter 3, but OECD experts put it at the 2.7% range. “I’ve been saying for some time that we need to be cautious, that the economy is recovering; the economy has not recovered” according to Minister Flaherty. This is not an isolated thought, but something lots of people concede with.
According to a new statement from Reuters, despite accepting the Canadian economy is flexible, private equity investors are cautious and prepared for the option of a double dip, delaying plans for initial public offerings. A partner at Birch Hill Equity Partners thinks that people are planning for the worst. What’s the way ahead for Canada? Buyout investments were slightly over $2.0 billion during the first three quarters, while the same period of 2008 recorded $8.5 billion.
Not only professionals, but also economists are far from optimistic. “This is going to be a period of no growth and false recoveries that don’t last”, states Edward Safarian who is one of Canada’s looked up to economists Accepting the Great Recession was blunted in Canada, he is anxious that the excessive capacities built can be a long term problem. The unemployment rate may stagnate as thousands of probable unemployed, who dropped out the workforce, will be returning in the next few years. If the government removes the stimulus too quickly this could lead to the recession coming back. Customers are watching these negative opinions - the consumer confidence index fell 5.7 points in November from October to 79, still below the pre-crisis level.
Another critical item to think about, is the warning given in the latest report by Dale Orr Economic Insight. Even when the GDP gets over zero, it’s per capita product is still tested as the Canadian population grows over 1% per annum. When the recession happened our living standard had already started to decline as there was a 0.6% shortage in 2008. If you would like to see the full details of the article entitled The Future of Canadian economy please continue reading on our homepage.