Following on from yesterday’s trade statistics, Canada’s export development agency predicted growth of 6.6% for the global economy in 2021 after a forecast decline of 4.3% for this year. They called out hard times for travel and tourism with many staying at home. For example, this week would normally have seen a large portion of Chinese tourists spanning the globe to celebrate the ‘Golden Week’ holiday. The impact on airlines and their extensive supply chains has been significant, with analysts not expecting travel to fully recover for another 2-3 years. The report also calls out domestic energy, which is also expected to suffer.
Export Development Canada (EDC) said in its semi annual forecast that Canada would do well in the following sectors next year: advanced technology, telecommunications, wood and minerals. All of these are strong sectors for Canada’s export market and we expect these segments to do even better next year. The impact of national and local lockdowns are impacting energy and EDC’s forecast, as expected, is more down beat. EDC chief economist, Peter Hall said, “Any economy that is energy-dependent is facing difficulties.” In short, reserves are high and demand is low.
Additional comments included: the Canadian dollar trading closely to its current range v US $ (74-76cents); and consumer savings would continue to grow, which gives hope for a strong rebound next year.