Cogito

Where does the growth come from?

Posted in Uncategorized by qmarks on November 30, 2009

Canada’s GDP grew at an annual rate of just 0.4 per cent in July through September according to Statistics Canada. The growth comes from 2.1% gain in capital expenditures, 1.2% from government expenditures and 0.8% from consumer spending quarter over quarter. And this growth number is roughly real growth because of the latest inflation rates. However the biggest share comes from capital expenditures because of the stronger loonie is making hi tech goods cheaper, so companies need to invest in their machinery to sustain the competitive advantage over rising currency.

What to expect?

Net exports make one third of Canadian GDP. Ergo I expect that this technological renovation and investment into businesses will increase the efficiency. That will offset the strong loonie effect on exports. I expect positive current account forecoming months. High gold prices and inflation expectations will sustain this level of demand for gold. The main driver can be gold exports and main tranche for the imports will be machinery and equipment.

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: