The good news on Canadian economy has come from the Governor of Bank of Canada – Stephen Poloz. According to the remarks from a speech prepared for Vancouver Board of Trade, Poloz said, “The bank expects that strong increases in U.S. business and residential investment will particularly benefit the sectors of Canada’s export market that have lagged so far, notably machinery and equipment and wood products…” (Source: thestar.com) It is widely believed that Canadian economy is making a good recovery as a result of the increase in the foreign demand for Canadian products. In my previous article (a-strong-chinese-economy-is-good-for-canada ), I had highlighted the positive impact of a strong China on the economy of Canada. Overall, it can be said that the economic omens are looking good from the Canadian perspective.
One of the important things that will be crucial for the Canadian economy in the near future will be its ability to support growth consistently and over a long period of time. Keeping inflation in check will also be something that would create an inclusive growth for most Canadians. Businesses in Canada were skeptical about new investments after the recession of 2007-08; however, economists are of the belief that the atmosphere is conducive for a robust investment. Another sign that the economy was back on track is the report that there was a spike in the number of new firms in Canada.
America – whose economy has a massive impact on the state of Canadian economy – has also shown signs of recovery. A strong American economy easily translates to increased economic activity in Canada. The exports of Canada are heavily dependent on the demand from the US, and this is one of the prime reasons why Canadian economists look keenly at the US economy.
It is not only the Bank of Canada’s governor who is optimistic about the Canadian economy; the Royal Bank too has upped the economic growth in 3rd quarter from the earlier forecast of 2.9% to an updated 3.4% growth. (Source: CBCnews) According to the Royal Bank, this update in the 3rd quarter growth is on account of the rebuilding of flood-hit areas in Alberta, and the end of a strike by construction workers in Quebec.
In June this year, a news report published in the Financial Post, pointed out to an assessment done by the economists on the state of Canadian economy. They were of the firm belief that Canadian economy will see improve substantially in the second half of 2013. The report, prepared by chief economist Craig Alexander, said that, “The Canadian economy is making reassuring progress after last year’s growth slump.”
For a long time now, Canadian economists have been looking at the signs that the economy is resurrecting itself. Given the thoughts and analysis of some of the most influential economists and financial institutions, it can be said that the coming months might be the starting point of a long and prosperous economic journey for Canada.