There will be growth for the Canadian economy in the next two years as the country avoids recession.
The latest outlook from the Conference Board of Canada forecasts real GDP growth of 1.8% for 2020 and 1.9% in 2021, but there are still some key risks ahead.
Not least is the global trade uncertainty; despite some more favourable movement in the US-China dispute, the NAFTA replacement, and Brexit, none of these are yet done deals.
Tepid global growth and a lack of non-resource business investment in Canada are also potential barriers to growth. Exports are also expected to see relatively weak growth of 1.2% in 2020 before rising to 1.9% in 2021.
Matthew Stewart, the Conference Board of Canada’s director, National Forecast, says there is not much that the federal government can do to improve growth in the years ahead.
“The newly elected minority government is set to cut taxes and boost spending, but this will be overshadowed by provincial governments who largely remain in cost cutting mode,” he said. “The fact that federal and provincial governments are running significant deficits when the economy is operating near its full potential creates the risk that deficits will balloon when the economy finally experiences a recession in the years ahead.”
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