Canada’s economy expected to grow despite ongoing pandemic

  • 2 months   ago

Canada’s economy grew by 0.1% in the first quarter of 2019, based on real GDP, while gross national income increased by 0.9% on the back of higher crude oil and bitumen prices, which helped exports.

Savings decreased by $3.6 billion, but there was $10 billion more spent on household products. Cannabis farming contributed to an improvement in the farming sector, with the industry adding $1.7 billion in this time period. Non-farm sectors invested over $16 billion into their businesses. In terms of housing, there has been a trend towards renovations rather than buying new homes, which saw renovation investment increase by 1.8% while housing investment declined by 1.6% and construction fell by 3.6%.

Total exports fell by 1%, with the crude oil and bitumen sector exports declining by 2.8% on account of higher prices, while exports from farming and fisheries fell by 9.5%. Imports rose by 1%, creating a negative trade balance of over $13 billion.

A recession is likely to hit sooner rather than later, and so it is important to create a digital economy that can help people to work from home, and also create jobs online. Canada has already seen a wave in the cryptocurrency space, with regulations being eased and more crypto taking place in the country. It had a huge impact on the iGaming and e-commerce sectors, as they began to allow cryptocurrencies to be used as payment methods. Bitcoin casino games online, or casino games where bitcoin could be used to pay and receive winnings, have become more and more common due to these regulations.

Shopify is one of the biggest examples of an online platform which allowed crypto payments. It saw an increase of over $5 billion in transactions once cryptocurrencies were approved on the platform, showing the scope of crypto at this time. At the same time, we have also seen Canadian casinos improve their numbers as well since allowing cryptocurrency payments. Many have had double the traffic, with the latest data showing that the gaming industry contributed more than 20 billion CAD in tax revenue.

 

 

Despite all this optimism, Canada was still 4th among the G7 countries in terms of economic growth, lagging behind the USA, UK and Japan. However, the fact is that quarterly data is a lot more volatile than yearly numbers, and so it is hoped that the full year’s growth will turn out to be better than forecast right now. As a case in point, the previous quarter’s growth number’s had Canada as the best-performing G7 economy, which shows how the quarterly growth figures can be volatile and seasonal. For example, car sales drop during the fall and winter months in Canada, which means that there will always be an accompanying fall in the growth numbers during those months. The Bank of Canada is predicting 1.6% growth in 2020 and 2% growth in 2021.

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