Photo by OECD
The Organization for Economic Co-operation and Development expects Canada to lead economic growth among the G7 countries during the first half of this year. The favourable prediction is mainly based on increasing exports. When the data is finalized, the report predicts that the Canadian GDP will have grown by 5.2 per cent in the first quarter and 3.8 per cent in the second quarter of 2011. If the expected figures prove accurate, Canada will experience its second-best quarter of the decade.
Getting over the hurdle
According to the analysts, the economy’s considerable progress is driven largely by robust domestic demand and recovering foreign demand for the country’s exports. An OECD economist added that “a strong Canadian dollar, healthy corporate profitability, and improved access to credit are likely to contribute to solid business investment conditions.” Judging from the overall data, it seems that Canada’s economic recovery from the global recession is becoming self-sustained, and worries about a possible return of the crisis are heard less and less.
If the trend of increase holds up, it could exert pressure on the Bank of Canada to raise interest rates later in the year to prevent excessive inflation.
Among the G7 countries, Germany is expected to rank second on the economy performance list, with rates of 3.7 and 2.3 per cent respectively in the first two quarters. The report also shows that the overall economic outlook has improved for all G7 countries excluding Japan (due to uncertainties over the aftermath of last month’s disastrous earthquake, especially concerning the volatility of Fukushima nuclear plant.)
