NEW YORK (S&P Global Ratings) June 28, 2021--S&P Global Economics slightly raised its Canada real GDP growth forecasts for 2021 and 2022 to 6.1% and 3.2%, respectively (was 5.5% and 2.4% in its March report), according to a new recently published report, "Economic Outlook Canada Q3 2021: Growth Setback In The Spring Will Give way To Summer Boom."
"The risks to the economic outlook have become more balanced," said Satyam Panday, primary credit analyst, adding that despite a third-wave of COVID-19 that disrputed the economy in the second quarter, the worst appears to be over as coronavirus caseloads decline, vaccinations pick up, and provinces beginning to lift restrictions.
However, the report noted that payroll employment wouldn't fully recover to its pre-pandemic trend path before the end of 2023, owing to the missed employment growth because of the pandemic.
The acceleration of consumer price inflation has come despite activity restrictions in April and May, with inflation reaching 3.6% (year over year) in May. It will take the rest of the year to iron out supply side pressure to meet opening-up demand, which means the 3% handle on inflation will likely persist in 2021.
This report does not constitute a rating action.
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| Primary Credit Analyst: | Satyam Panday, New York + 1 (212) 438 6009; satyam.panday@spglobal.com |
| Media Contact: | Jeff Sexton, New York + 1 (212) 438 3448; jeff.sexton@spglobal.com |
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