ARCHIVE: ECONOMIC PERFORMANCE AND TRENDS
Canada Weathers Global Recession Better Than Most
Brenda Lafleur, Program Director, Forecasting and Analysis August 17, 2009
Canada is expected to move up in the ranking of international economic performance in 2009 and 2010—in part because other countries have been harder hit by the global recession—according to the Conference Board’s How Canada Performs: Economy Forecast 2010. After obtaining a low “B” grade and an 11th place ranking out of 17 comparator countries in 2008, Canada is expected to move up to 5th spot in 2010—narrowly missing an “A” grade. Canada’s relative ranking is expected to improve on five indicators. Canada is weathering the global recession better than most of its peers—a credit to its stable financial sector and a relatively healthier economic position upon entering the downturn. But obtaining a higher rank because other countries are falling farther is not the basis for sustainable prosperity. Some of Canada’s fundamentals, such as labour productivity, remain weaker than those of the global leaders. New Forecast for Economic Performance This is the first time that the Conference Board has used its How Canada Performs1 framework to forecast future report card performance, based on the recent OECD Economic Outlook. Canada’s relative ranking is expected to improve on five indicators: - GDP growth
- unemployment rate
- employment growth
- inward foreign direct investment
- outward FDI performance index
No Changes at Top and Bottom of Ranking Despite substantial movement among the 17 countries, the top and bottom positions are not expected to change between 2008 and 2010. - Norway is expected to retain 1st place in the Economy ranking in both 2009 and 2010. Norway’s economy has been more resilient than most, and it is partly protected from current economic conditions by its large petroleum sector.
- Ireland—which fell from 1st place in 2007 to last place in 2008—is forecast to remain in 17th place on overall economic performance in 2009 and 2010. With its economy reeling from the global economic crisis and a meltdown in its domestic property market and construction sector, Irish income per capita, which improved from 17th place in 1996 to 3rd place a decade later, is forecast to fall to 7th place in 2010.
Brighter Outlooks Australia, the United States, and Belgium—like Canada—are forecast to move up over the next two years. - Australia is expected to rise from 6th place in 2008 to 2nd place in 2010. In addition to posting the strongest GDP growth rate next year, Australia’s employment is forecast to fall by just 0.3 per cent—second only to the resurgent U.S. economy (where job growth is expected).
- The massive fiscal stimulus by the U.S. Federal Reserve and Treasury will help the United States move from 8th position in 2008 to 3rd place in 2010.
- Belgium’s improvement to 4th place will be due entirely to its expected relative strength on inward and outward FDI. Belgium attracts much more FDI than the size of its economy would warrant.
Significant Declines - The United Kingdom is among the countries expected to fall sharply in overall economic performance between 2008 and 2010. The financial crisis has severely affected U.K. credit markets and housing prices, leading to a contraction in consumer spending and business investment.
- The Netherlands will fall from 3rd to 15th place. The economic crisis came later to the Netherlands than it did to some other countries, so the Dutch economy will look much worse in 2010 than 2008.
| Brenda Lafleur
Program Director
Forecasting and Analysis
613-526-3090 ext. 349 | Related Publications
Canadian Outlook Economic Forecast: Summer 2009
Canadian Outlook Long-Term Economic Forecast: 2009
U.S. Outlook: Summer 2009
World Outlook: Global Economic Trends and Prospects: Summer 2009 Related Conference
2009 Fall Technical Forecasting Seminar Related Executive Network
International Trade and Investment Centre
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