What does the prospects hold for the Canadian economy?
The Canadian economy has been acknowledged as well adjusted for this recession. A sound financial system, speedy real estate market recovery, solid social and health care networks, abundant natural resources - all these factors were supposed to make recession brief and not very painful. It’s is still, nevertheless, hazy what the future will bring.
The Canadian economy has been the material of quite a few debates this autumn. Some experts think that the Canadian economy is too good to be true, despite the lessening of the recession in OECD countries, although other experts accept the recovery.
The GDP for the third quarter was calculated to rise 2% according to the Bank of Canada, so the 0.1% contraction in August wasn’t brilliant news. The genuine growth seen in most industries, have grown due to direct stimulus action. The Bank of Canada is predicting a 3.3% rise in quarter 4 after the disappointment 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. The minister is not the only person to think this.
With the chance of a double dip, private equity investors are delaying their plans despite believing the Canadian economy is flexible, according to a recent report from Reuters. A partner at Birch Hill Equity Partners thinks that experts are ready for the worst. What’s the way forward for Canadians? The difference in buyout investments over the first 3 quarters in comparison to the identical time last year was approximately a $6.5 billion drop.
Not only analysts, but also economists are far from hopeful. “This is going to be a period of no growth and false recoveries that don’t last”, declares Edward Safarian who is one of Canada’s admired economists He also declares that the Great Recession was weakened in Canada, but is fearful a long term problem may be caused by the excessive developments built. The unemployment rate may decline as thousands of potential unemployed, who dropped out the workforce, will be returning in the coming few years. If the government takes away the stimulus too hastily this could lead to the recession reappearing. The negative opinions are reflected in the consumer confidence index with a decline of 5.7 from the October figures of 84.7 points.
Another important issue to think about, is the warning published in the latest report by Dale Orr Economic Insight. The Canadian population increases at rate of over 1% per year, so even when GDP growth gets over the zero line, per capita product is still questioned. When the recession began our living standard had already started to drop as there was a 0.6% deficiency in 2008. For the remainder of our report on The Future of Canadian economy go to our website.