Canada Poised to Lead Growth

A new report from CIBC World Markets have noted that Canada’s economic prospects should lead the G-7 nations for much of the next decade. With strong commodity demand, comparatively low government and corporate debt, not to mention favorable demographics, Canada is forecasted to shine, outpacing many other major industrialized countries for as long as 5 – 10 years notes Avery Shenfeld, Chief Economist at CIBC.

As it stands, Canada stands in a better position to deal with upcoming challenges, compared to its competitors. Looking at the eurozone debt crisis, and the geopolitical issues in Asia, many investors have placed their attention in that direction rather than seeing what Canada has to offer in the second decade of the 21^st century.

With Canada expected to show better economic growth, corporate earnings, dividends and many other rewards are most likely to follow.

From what I have seen in the past year, Canada has shown the world that it has a strong system, especially in its banking. Canada has been the only major country not to have any banks declare bankruptcy throughout the recession, which is a great feat. We currently have Finance Minister Jim Flaherty working towards creating various rules and regulations to help keep Canada run even better. With Flaherty placing a regulator for the entire country, we can expect smoother trades among many other things.

I for one am proud to be Canadian, and at the fact that the patience and will power shown throughout the recession is showing its rewards.

Shenfeld has agreed that in the research done, economic rebounds form recessions have been linked to financial crisis face much greater headwinds than the average up cycles. With the amount of government debt, and the demand for the tightening of the fiscal policy in its aftermath show to be a key mechanism for the relationship.

What all of this means is that countries, which have higher indebtedness, generally have slower rates of real capita growth in the five year following the recession.

With all of this said, Canada has been position to outpace major industrialized economies over the next few years. Canada has less gross debt, and much less net debt than many other nations.

It is expected that the Canadian economy will expand 3.2% this year, and 2.5% in 2011, before showing an average of 3% for the next few years.  We have the Bank of Canada predict growth to be at 3.7% this year, 3.1% in 2011 and 1.9% in 2012.

The facts show that Canada is positioned to do very well compared to many other countries, and I for one am glad to see Canada getting recognition for is economy.