http://www.thestar.com/business/econ...next_year.html
OECD predicts pick-up in Canada’s economy next year
Canada’s economy is set to expand next year as exports and business investment pick up steam, according to the latest forecast from the economic think-tank.
By: Published on Tue May 06 2014
Canada’s economy is set to expand next year as exports and business investment pick up steam, according to the latest forecast from the OECD.
But risks remain in the housing market and provincial governments, in particular, need to watch their health care spending.
Growth in the Canadian economy will reach 2.75 per cent by 2015, the Organization for Economic Co-operation and Development said.
The economic think-tank for the world’s developed nations expects that a weaker loonie and growth in foreign markets will help Canadian exports gain momentum.
Businesses will also invest to boost capacity and become more competitive, the forecast said.
Spending by consumers is likely to strengthen, as the housing market “should decline towards a more sustainable level,” the OECD said.
With the economy firing on all cylinders, inflation is projected to rise to nearly 2 per cent by late 2015.
The Bank of Canada should hike interest rates as inflation rises, the group advises.
“Fiscal consolidation” should continue among all levels of government, it noted. “Most notably, provincial governments should continue to work on reforms that would limit growth in health-care expenditures,” the forecast said.
To keep housing market risks in check, “mortgage-insurance coverage should be limited to only part of lenders’ losses.”
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Ontario export sector poised for growth: Report
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CMHC again moves to tighten mortgage insurance rules as housing market cools
Last month, the Bank of Canada, worried about business spending, cut its growth forecast for 2014 to 2.3 per cent.
The Canadian Mortgage and Housing Corp. has made several moves to tighten the home mortgage market.
For instance, starting at the end of May, it will no longer offer insurance on Canadians who are purchasing a second property. Nor will it insure purchases by self-employed workers without third-party income validation.
The positive forecast for Canada is part of a report that expects global growth and trade to strengthen “at a moderate pace through 2014 and 2015,” the OECD said.
“The recovery from the Great Recession has been slow and arduous, and has at times threatened to derail altogether,” the forecast said. “The major advanced economies are finally gaining momentum. Private-sector confidence is rebuilding. After years of weakness, investment and trade have started to rebound.”
The recovery in the U.S. should gain pace, while a more modest upturn is likely in the euro area, the OECD said.
OECD predicts pick-up in Canada’s economy next year
Canada’s economy is set to expand next year as exports and business investment pick up steam, according to the latest forecast from the economic think-tank.
By: Published on Tue May 06 2014
Canada’s economy is set to expand next year as exports and business investment pick up steam, according to the latest forecast from the OECD.
But risks remain in the housing market and provincial governments, in particular, need to watch their health care spending.
Growth in the Canadian economy will reach 2.75 per cent by 2015, the Organization for Economic Co-operation and Development said.
The economic think-tank for the world’s developed nations expects that a weaker loonie and growth in foreign markets will help Canadian exports gain momentum.
Businesses will also invest to boost capacity and become more competitive, the forecast said.
Spending by consumers is likely to strengthen, as the housing market “should decline towards a more sustainable level,” the OECD said.
With the economy firing on all cylinders, inflation is projected to rise to nearly 2 per cent by late 2015.
The Bank of Canada should hike interest rates as inflation rises, the group advises.
“Fiscal consolidation” should continue among all levels of government, it noted. “Most notably, provincial governments should continue to work on reforms that would limit growth in health-care expenditures,” the forecast said.
To keep housing market risks in check, “mortgage-insurance coverage should be limited to only part of lenders’ losses.”
MORE AT THESTAR.COM
Ontario export sector poised for growth: Report
Ontario deficit to grow but Charles Sousa promised balanced budget by 2017
CMHC again moves to tighten mortgage insurance rules as housing market cools
Last month, the Bank of Canada, worried about business spending, cut its growth forecast for 2014 to 2.3 per cent.
The Canadian Mortgage and Housing Corp. has made several moves to tighten the home mortgage market.
For instance, starting at the end of May, it will no longer offer insurance on Canadians who are purchasing a second property. Nor will it insure purchases by self-employed workers without third-party income validation.
The positive forecast for Canada is part of a report that expects global growth and trade to strengthen “at a moderate pace through 2014 and 2015,” the OECD said.
“The recovery from the Great Recession has been slow and arduous, and has at times threatened to derail altogether,” the forecast said. “The major advanced economies are finally gaining momentum. Private-sector confidence is rebuilding. After years of weakness, investment and trade have started to rebound.”
The recovery in the U.S. should gain pace, while a more modest upturn is likely in the euro area, the OECD said.
