Canadian economy still in doldrums
Canada’s economy, while resilient, is experiencing a major slowdown, with GDP growth projected at just around 1% in 2025. This is due to factors like rising unemployment, sluggish growth, and ongoing trade tensions with two of the largest economies of te World – China, India and Russia. Canada has also spoiled its relationship with India because of support to terrorism and Khalistani terror groups by its previous PM Trudeau and government.
The OECD projects a mere 1% GDP growth, narrowly avoiding a recession. The economy is navigating severe turbulent waters, but has shown one positive sign that is if inflation falling from its peak. However a whacking tariff by Trump and the elusive FTA with India and problems with China and Russia will surely complicate te economic woes.
Here’s a more detailed look:
Challenges:
Slowed Growth: Canada’s GDP growth is projected to be just above 1% in 2025, well below its historical average.
Rising Unemployment: Unemployment is expected to rise to around 7% by year-end.
Trade Tensions: Ongoing trade wars with USA, China, India and Russia and weak productivity are pressuring and denting the economy.
Low Productivity: Both housing and healthcare sectors have lower-than-average labor productivity, potentially hindering overall economic growth.
High Interest Rates and Inflation: These factors are slowing consumer demand and reducing investor confidence.
Strengths:
Resilient Financial System: Canada’s financial system has proven to be resilient, weathering the pandemic, inflation, and interest rate hikes.
Solid Labor Market: Over 1.1 million more Canadians are employed today than before the pandemic.
Falling Inflation: Inflation has fallen significantly from its peak.
Real Wage Growth: Real wages have increased, meaning Canadians have more purchasing power.
Specific Industries:
Forest Industry: Canada is a world leader in the export of pulp and paper and softwood lumber.
Service Industry: The service industry is dominant, employing three-quarters of the population.
Natural Resources: Canada is a top exporter of crude petroleum and natural gas.
Overall, Canada’s economy faces a complex situation, with both challenges and opportunities. While growth is slowing and unemployment is rising, the financial system is resilient, and the labor market is strong. The economy is navigating a period of uncertainty, with limited potential for growth in the coming years.
In mid June Canada will be hosting the G7 summit but with absence of leaders from World’s top economies namely China, India and Russia things look pretty bleak for Canada.
