TEC Canada is pleased to provide the Andersen Monthly Economic Report exclusively to our members. The former assistant chief of the Bank of Canada’s research department, Dr. Peter Andersen provides valuable economic insight to help you make better business decisions.
- Inflation is disrupting Canada’s economy. It is limiting the amount that people can buy. We do not expect an appreciable move towards the Bank of Canada’s 2% inflation target anytime soon, not even in 2023. Hopes that rates will peak and subside next year are probably unrealistic.
- Get ready for a house price crash in Canada. It has already started. It is a buyers’ market for resale homes now in parts of Ontario and BC. It will soon spread across the country, even to markets where prices have not been seriously out of line with income.
- The US economy now shows 2 consecutive quarterly declines in real GDP in the 1st and 2nd However, the economic weakness is not yet widespread enough to constitute a true recession. Business sector investment intentions are still positive.
- There were also steady gains in payroll jobs in the 2nd Quarter. The increase of 372,000 in June was a healthy number. This was about the same as in March, April and May
- Inflation worldwide has been higher than expected. Given its global spread, it will be hard to bring inflation down quickly in North America in 2023. This means more volatility for foreign exchange rates and foreign debt. The International Monetary fund has lowered its forecast for global economic growth to only 3.2% compared to 6.1% in 2021.
- Wage growth is not keeping up with inflation. In the Euro Area it is running at 8.6% y/y (June). In emerging market and developing countries, inflation is estimated at an average of 9.8% y/y in the 2nd Quarter.
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