National Bank Financial Group’s Financial and Economic Outlook

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The global economy is returning to a growth track after seeing the worst recession in more than 60 years, with central banks and governments around the world having done their best to loosen up the credit markets in the past year.

With the massive amount of stimulus that is being injected into the credit markets, credit markets are normalizing and economic growth has resumed in many countries and regions.

With Canada’s banking system being one of the best capitalized in the world, the economy did not escape the financial crisis or the effects of global recession.

The Gross Domestic Product (GDP) contraction was the deepest since 1990-1991.

The Canadian economy as a whole contracted less than the American economy.

With recovery underway in Canada, we will be entering the new year on good terms.

We are seeing residential and business investment reviving and the labour market stabilizing, it is expected to be sustained.

The global recovery for 2010 is likely to show respectable growth next year, around 2.9%.

The view of National Bank Financial Group economists is that global recovery will lead the Bank of Canada to begin raising its policy rate early in 2010, and will continue removing accommodation through the year.

This campaign is likely to take the overnight rate from the current 0.25% to 1.50%.

We will have to wait and see how it all pans out, hopefully we do not rates increase earlier than expected as National Bank Financial Group expects.

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