New report shows Canada's economy growing at fastest pace in a decade

Friday, 11 June 2010 01:18:52 (GMT+3)   |  
       

According to the June 10 Economic Outlook report by the Royal Bank of Canada (RBC), Canada's economy is set for rapid growth in 2010 with the nation's GDP projected to grow by 3.6 percent.  The RBC further reported that Canada's GDP grew at 6.1 percent in the first quarter, the fastest pace in over a decade.

"Canada's economy continued to surge ahead as domestic demand was backed by increases in consumer, housing and government spending," said Craig Wright, senior vice-president and chief economist, RBC.

The report indicates Canada's economy should continue to show gradual improvement as businesses rebuild inventories following a sharp reduction during the recession.

GDP is expected to rise 3.5 percent in 2011 (down from 3.9 percent in the previous Outlook).

The report indicates that the global economic recovery remains on track despite recent volatility associated with European debt. World growth forecasts have been revised higher in 2010, as the European bailout package alleviated some concerns about the region, although investors remain cautious. Eurozone GDP growth is forecasted to be 0.8 percent in 2010 and 1.7 percent in 2011.

RBC expects US GDP to increase by 3.1 percent in 2010 and 3.4 percent in 2011. The report notes that a surge in consumer spending and continued business investment in the US fuelled a three percent increase in the first quarter, at an annualized rate.

Among Canadian provinces, economic growth in 2010 will be boosted by gains in Newfoundland and Labrador (4.1 percent), Saskatchewan (3.8 percent), B.C. (3.5 percent) and Ontario (3.5 percent). Growth in Alberta will rise 3.1 percent this year but strengthen to 4.2 percent in 2011, the second highest rate of growth behind Saskatchewan (at 4.4 percent).

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