The Canadian economy
weakened significantly in in the second half of 2012, posting growth of just
0.6 in both the third and fourth quarter respectively. For all of 2012, the
Canadian economy expanded 1.8 per cent.
Although consumers ramped up spending in the second half of 2012, households
continue to undergo significant de-leveraging following several years of
low-interest debt accumulation. Excluding recessionary periods, household
credit is currently growing at its slowest pace in nearly 30 years, which will
likely translate into slower spending. Besides a likely slowdown in
consumer spending, a much needed pivot from consumption to business investment
driven growth looks doubtful. Anticipated investment for 2013 is set to rise
just 1.7 per cent, the smallest increase since 2009. Add-in a still
struggling global economy and you have a Canadian economy that will likely
struggle with below 2 per cent growth for much of 2013 before picking up in
2014.
Copyright BCREA - reprinted with permission
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