Canada

RGE's Q3 2010 Canada Outlook

RGE has marginally revised up its projections for Canadian growth to 3.2% in 2010, reflecting in part a stronger Q1 result and the strength of labor market indicators in Q2. Given our views on the global outlook, our concerns about the sustainability of the wealth and income effects that have driven Canadian demand, we find consensus estimates of 3.6% for 2010 and 3.1% for 2011 optimistic. Like many economies, Canada’s growth rate will decelerate in H2 2010 as external demand slows, stimulus wanes and property markets cool. The increase in purchasing power, relatively stronger household, corporate and government balance sheets will keep domestic economic conditions by far the strongest of the G7 (though this isn’t a difficult feat). However, Canada’s open economy makes it susceptible to the reduction in global demand and financing, weighing on domestic income growth.  

Read the Q3 2010 Canada Outlook.