Tag Archive for canada

Canada’s Economy Restrained by Consumer Debt Levels

Consumer spending is restrained by a cooling housing marketplace and under performs the USA mainly due to large household debt amounts and Canada’s economic system will develop only modestly over the following two years, a Reuters survey found.

Those forecasting are virtually unchanged from January’s survey and lower than outlooks for the USA, which will be anticipated to increase 2.7% in 2014 and 3% in 2015.

Economists decreased their outlook for annualized increase in the 1st quarter of the year to 1.7% from 2.2% in January’s survey. Predictions for the remaining quarters of the year and the 1st half of next yr were virtually unchanged.

National demand, and in change, consumer outlay, has been among the significant reasons why Canada’s market recovered more rapidly in the monetary disaster than the USA.

That need was mainly a result of a housing boom, that has been fuelled by record-low borrowing expenses. Unlike in the USA, which endured a punishing house market crash, Canada’s home market has moved in a straight-line up for a long time.

But the home marketplace is now cooling-down, and a couple of market watchers remain worried about threats of an US-fashion crash. Along with high-flown home debt degrees, that’s created the Canadian customer more careful about disbursement.

Truly, Canada’s disposable home debt-to-earnings ratio reaches a close-record-high of 164.0%. By comparison, U.S. families reduced their indebtedness in the aftermath of the crash.

Economists in Wednesday’s survey anticipate Canada’s home market to continue to great.

Prognosticators anticipate that amount to fall farther to 172,000 houses next yr, compared with the 180,200 forecast three months past.

Canadian housing starts reached a yearly pace of over 200,000 in the price-fueled growth that adopted the monetary disaster.

Nevertheless, the majority are perhaps not worried about an out right crash.

“We nevertheless view that as a low chance threat now.

A substantial increase in the Bank of Canada’s key interest in the present 1.00% and a surprising fall in job would be two causes, Issa included. He does not anticipate either to occur.

Rising prices will climb up to 1.9% next yr, a contact away from the reserve bank’s 2 percent goal, the survey revealed. Nevertheless, another survey taken before this month discovered the banking isn’t likely to raise its key interest rate until the 3rd quarter of next yr.

Obviously this is just a basic economic summary and for up to date information on the Canadian economy, it’s best to check out the local TV and media sites.  To watch the main TV stations if you’re based outside Canada will require a proxy server to access them – you can find one here.

The greatest prospect for the Canadian market is an exporter resurrection, which will be anticipated to happen over the following two years as more powerful U.S. economic growth prospects to increased need for Canadian products – including electricity, automotive and mineral exports.

New governor of the Bank of England Mark Carney

A poorer Canadian dollar may also help by fostering exporters’ revenue in local currency periods. A Reuters survey ran early this month identified foreign trade strategists anticipate the money to weaken over the next 1 2 or even 3 months.

Canadian Economic Outlook

If you live in Europe, there is a tendency to doom and gloom when you are talking about economics.  However slowly but surely the expectations are beginning to rise, the word upgrade is starting to be used more often in the IMF assessment reports.

The latest economy to be revised upwards is that of the Canadian economy, with a small increase in the growth expectations for this year and next.  Canada was never quite as affected by the global financial problems having to some extent ‘put it’s house in order’ some years ago.  The growth rate is only expected to be around 2-2.5% but this comes on the back of consistent if unspectacular growth over the last few years.

Canadian TV - CTV

The IMF continue to emphasize the global situation which is dragging back many economies including Canada.   Growth around the world is expected to be around 3%, although this should rise significantly over the next few years.

Countries like Canada have based their economies on slow, consistent growth and limiting public expenditure and debt.  The lessons of European and the US appear to have strengthened this resolve.  Although Canada has not suffered any significant GDP falls, there is an air of austerity to the policy making.  If you watch regularly the Canadian finance and news shows you will see this being reflected in day to day life.  Here’s how I watch the Canadian broadcaster by the way – http://www.proxyusa.com/how-to-watch-canadian-tv-from-the-us , although I haven’t figured out how to watch on more TV yet.  If you prefer a video explanation that can bring Canada into your living room – here’s another method – right here.

The IMF of course are not always correct in their growth figures.  The Bank of Canada has a much more optimistic expectation for 2014, of nearly three percent in 2014.  We will have to see who comes out closest in next years economic data.