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Canadian Outlook Executive Summary: Winter 2010

The Conference Board of Canada, 11 pages, January 17, 2010
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This quarterly economic forecast provides highlights of the Canadian Outlook report, which presents the short-term national outlook.

Document Highlights

  • Coordinated and extensive policy efforts the world over have been successful at pulling the global economy on to a path of recovery. But the success has come at significant cost in the form of deep deficits across many of the world’s economies, including our own.
  • The U.S. economy came out of recession last year, posting robust growth in the third quarter of 2009. However, a revival in U.S. employment is needed to maintain momentum in the recovery.
  • Government and household spending will contribute the most to Canada’s economic growth in 2010. Stimulus spending is expected to peak this year, while low financing rates and rising consumer confidence should help loosen consumers’ purse strings.
  • Despite Governor Mark Carney’s concerns about over-indebted households, we assume the Bank of Canada will refrain from pushing up interest rates until mid-year.
  • The rebound in retail gasoline prices has helped move the allitems consumer price index from deflation back to inflation. Consumer prices will also be boosted mid-year by the effects of sales tax harmonization in Ontario and British Columbia.
  • As the global economy recovers, global capital markets are starting to settle, helping to stabilize the effects on the U.S. dollar and the loonie. The Canadian dollar is expected to average just under US$0.96 in 2010.