• Canada’s economic fortunes are tied to America’s, but the country has taken a more conservative approach to the pandemic, leading to slower real GDP growth.
• Now, however, Canada’s economy is on better footing than America’s, with better public health policies leading to faster employment recovery and a commodity boom.
• Inflation has surged, but firms expect cost pressures to decelerate and the Bank of Canada has raised rates by 0.25%.
• Job growth has been strong and broad-based, with immigration and tourism returning.
• Capacity constraints are abating, and wage growth remains comparatively muted.
• The commodity cycle is a headwind, with the value of Canadian commodity exports falling.
• Canadian banks are not tightening as aggressively as their American counterparts.
Published February 11, 2023
Visit Apricitas Economics to read Joseph Politano’s original post Canada’s Balancing Act