Canada Country Snapshot


EIU

Canada - Economist Intelligence Unit - The Economist

DOMESTIC POLITICS: The fortunes of the ruling Conservatives are waning. Their economic policy response to the current recession has appeared inadequate, in scale and speed of implementation, and the main opposition Liberal Party will continue to exploit this over the outlook period. The Liberals were able to force a system of budget progress reports on the government in January and are now in a strong position: the Tories hold only a minority of seats in parliament and are vulnerable to defeat in a vote of no confidence, which would trigger another general election or transfer of power. With two of the three parties--the Bloc Quebecois (BQ) and New Democratic Party (NDP)--currently opposing the budget, the Liberals only need to withdraw their support to trigger another election. However, they are aware of voter disinterest in another national poll so soon after the last one, and are wary of appearing to exploit the recession for political gain. The other two opposition parties will also not wish to lose votes to the Liberals, and their support is not assured. Given their persistent opposition to the current budget since its inception, however, a reversal would be extremely damaging. We therefore expect the Liberals to use the next progress report in December, rather than the June report, to trigger another election. On current performance, they will win the election, although also only with a minority of seats in parliament.

Country Forecast Overview (3 Year)
Key Indicators 2008 2009 2010
Real GDP Growth (%) -.70 -3.80 -.20
Consumer Price Inflation (av;%) 2.37 .10 1.50
Budget Balance (% of GDP) 1.40 -2.10 -3.70
Current-Account Balance (% of GDP) .51 -2.70 -1.70
Exchange Rate US$:Euro (av) 1.07 1.16 1.09
Exchange Rate US$:Euro(year-end) 1.22 1.11 1.07

Canada GDP PPP & GDP Growth Rates
2004 - 2008
Canada GDP Growth Rate Chart

Year GDP in Billions of USD PPP % GDP Growth
2004 1,049.90 2.05
2005 1,131.00 1.97
2006 1,204.44 1.80
2007 1,263.05 1.40
2008 1,295.86 -0.70
Source: EIU Country Data

Canada: risk assessment
Risk January 2009
Sovereign risk AA
Currency risk AA
Banking sector risk AA
Political risk AAA
Economic structure risk AA
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