RBC Economics: Canada on the Path for Recovery in 2010

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With a challenging year behind us, the Canadian economy is set for a nationwide recovery in 2010 according to a new report by RBC Economics.

The new report indicated that although the Canadian economy contracted 2.5% in 2009, we will be seeing a return to positive growth in 2010.

According to the report, the Canadian economy is set to grow in 2010 with the real gross domestic product (GDP) rising by 2.6% and will continue to expand in 2011, at 3.9^. It was also indicated that the peak of stimulus spending will occur in 2010, with improving credit conditions fuelling froth both in 2010 and 2011.

Consumer spending is still being weighed down by the 8.7% unemployment rate, however in 2010, RBC forecasts that the labour market is set to stabilize, with the unemployment rate falling and consumer spending increases.

In concerns with the global recession, falling commodity prices and job cuts have weighed on consumer confidence throughout the early part of 2009, however with interest rates being so low and consumer confidence improving, consumer spending is expected to increase by 2.4% in 2010. There will be an accelerating growth rate of 2.7% in 2011.

The unemployment rate is expected to remain quite high in 2010 at an average of 8.7%, before falling to 7.8% in 2011.

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