Peter Hall, chief economist of EDC noted that Global recovery remains elusive.
The agency’s global export forecast says that world economic growth will be at 3.7% this year, which is still not enough to be called true recovery. It should strengthen to 4.2% growth in 2011.
EDC goes to say that emerging economies will be able to enjoy faster and steadier growth than developed countries like Canada’s.
Canada’s growth rate will be 2.5% this year and 2.9% in 2011, the EDC forecasts. This follows a contraction of 2.6% in 2009.
In order to achieve recovery, the EDC notes that the world economy will have to navigate some risks. Stimulus money that governments have pumped in to their economies around the world is running out and could cause growth to falter. Loan defaults are hitting peak levels, which could also increase the drag.
Canada’s housing market may be strong, however the weaker housing markets outside of Canada is a warning signal says Hall. He continues to say that although governments may try to stimulate their economies with massive deficit spending, that stimulus does not seem to be touching some of the regular areas of the economy that one would expect to see recover.
The next few months will be crucial before we can actually call it something solid.