Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Report on Business

Economy Lab

Delving into the forces that shape our living standards
Best Business Blog, EPPY awards, 2011 and 2012

Entry archive:

Economy Lab has moved

Only Globe Unlimited members will now have access to a wide range of insightful commentary
and analysis on the economy and markets previously offered on this page.


Globe Unlimited subscribers will be able to read these columns,
written by some of Canada’s most deeply respected economists,
such as Christopher Ragan, Sheryl King, Andrew Jackson, and Clement Gignac,
as part of our ROB INSIGHT section.


All of our readers will still be able to browse the Economy Lab archives and read our
broader coverage of economic data and news by accessing their 10 free articles a month.


Learn more about Globe Unlimited and how to subscribe.

RBC says the expected expansion of gross domestic product in 2010 and 2011 would mark the fastest pace of growth in four years for Canada. (Adrien Veczan/Adrien Veczan for The Globe and Mail)
RBC says the expected expansion of gross domestic product in 2010 and 2011 would mark the fastest pace of growth in four years for Canada. (Adrien Veczan/Adrien Veczan for The Globe and Mail)

No boom on the horizon for Canada Add to ...

Solid growth, but hardly a boom.

The Canadian economy will grow by 3.2 per cent in 2011, or a notch better than the expected 3.1 per cent pace this year, according to the Royal Bank of Canada's latest forecast. The bank expects growth to fall back to 3.1 per cent in 2012.

RBC chief economist Craig Wright pointed out that the expected expansion of gross domestic product in 2010 and 2011 would mark the fastest pace of growth in four years for Canada.

More related to this story

"Financial conditions remain supportive of domestic growth, which will be the main engine of growth going forward," Mr. Wright said.

RBC says the U.S. will grow 2.7 per cent this year, 3.3 per cent next year and 3.6 per cent as U.S. businesses and consumers start spending again.

RBC expects the euro zone to recover even more slowly, growing 1.7 per cent this year, 1.8 per cent in 2011 and 1.9 per cent in 2012.

The forecasts suggests a reversal of positions for Canada and the United States in 2011. While the U.S. suffered a much deeper slump, Canada's recovery may take a lot longer.

For Canada, the bounce back from the recession of 2008-2009 has been much less dramatic than in previous slumps.

And that means the unemployment rate, currently at 7.6 per cent, will come down only gradually. RBC is forecasting a jobless rate of 7.4 per cent at the end of 2011 and 7 per cent at the end of 2012.

The Canadian dollar is likely to remain near parity in 2011 and beyond, RBC said. That's likely to continue to slam Canadian exports and boost imports, which in turn will put a drag on economic growth.

RBC also ranks the provinces in growth rates. And it's looking for Saskatchewan and Newfoundland to lead the way in 2011, with Alberta a close third.

 

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular