Canadian Economic Performance in 2008
January 5th, 2009 at 9:12 am - by Giuseppe Burtini
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While consumer confidence in Canada is reportedly at record lows, Canada’s real 2008 economic performance is a conglomerate of stability and resistance to a global recession and economic downturn.
A number of annual reviews of Canadian economic performance are published, but in fact, a number of important variables are available to non-economists - from the finance minister’s predictions, to numbers released by Statistics Canada, a range of financial and economic performance data is available to everyone.
Jim Flaherty, finance minister under Harper’s Conservative minority, projects growth of 0.3 per cent in Canada’s GDP for 2009, down from his 2008 budget prediction of 2.4 per cent growth.
The Toronto Stock Exchange took the most worrying fall - a collapse of over 35 per cent year-to-year - roughly matching that of Standards and Poor’s 500 index, and international markets.
Canada’s central bank, the Bank of Canada, dropped fiscal lending rates to 1.5 per cent, a rate last met nearly fifty years ago - but, consumer banks did not follow; on the previous interest rate cut - a cut of 0.75 per cent - Scotiabank and the Royal Bank of Canada, took cuts of less than half of a percentage point to their interest rates.
In November, Statistics Canada released an important economic indicator information - an unemployment rate sitting at nearly 6.3 per cent, up from February’s 5.9 per cent.
The loonie took a dramatic fall this year, after a series of years drove growth after the dot-com crash eventually matching and passing the U.S. dollar, nearly a 20 per cent fall this year left the Canadian dollar at a paltry 82 cents.
Analysts suggest that this coming budget from the Conservative government may call to run a deficit as deep as $5 billion Canadian; a dramatic leap from Flaherty’s previous “no deficit” claims earlier in 2008.
Number of Canadian banks or credit unions to fall apart during the financial crisis near the end of 2008? None.
Economic performance in 2008 has many investors with available capital excited for 2009; investors following a “value investing” type blueprint are reporting that reduced stock prices, availability of market funds, and the slowly falling real estate market make 2009 an excellent year for investment. Some analysts aren’t sure that 2009 is the bottom, or even that a bottom is achievable without a political collapse.
