The Canadian economy is poised for a sharp rebound this year and next after a year of pandemic restrictions, but a “red hot” housing market fuelled in part by government-funded household savings could still hamper growth, a new report says.
The Conference Board Of Canada expects the Canadian economy to grow 5.8 per cent in 2021, the highest since 2007 when a global commodities boom sent Canadian GDP rocketing up to 6.8 per cent. Growth in 2022 is expected to average four per cent, double the roughly 1.8 per cent average economists predicted before the pandemic.
The report, entitled “Hope At Last,” echoes other economic outlooks that see the Canadian economy roaring back to life once restrictions are lifted, reversing one of the deepest periods of retrenchment in recent memory. The comeback will be fed in part by the immense household savings Canadians accumulated last year, with the savings rate surging from 1.4 per cent prior to the pandemic to 14.8 per cent in 2020.