US Economic Profile

The largest and still the most important market in the

world, the United States of America’s economy is driven by
consumers but is troubled by high debt levels.

The United States of America (US or USA) has the world’s largest
economy. According to the CIA World Factbook, 2007 GDP is believed
to be $13.84 trillion. This is three times the size of the next largest
economy, Japan, which has a GDP of $4.4 trillion. US dominance has
been eroded however by the creation of the European Union common
market, which has an equivalent GDP of over $13 trillion, and by the
rapid growth of the BRIC economies, in particular China, which is
forecast to overtake the US in size within 30 years.

The recent failure in the US housing and credit markets have resulted in
a slowdown in the US economy. 2007 GDP growth was estimated at
2.2% but in 2008 it is projected to be just 0.9%, down from the 10-year
average of 2.8% (see chart at end of article).

In common with most developed countries, Services is the key sector of

the economy. In 2007, services made up 78.5% of GDP, industry 20.5%
and agriculture less than 1%.

Around two-thirds of the total production of the country is

driven by personal consumption. Although the US is often referred to as
a free market economy, this is not entirely true, since there are
government regulations protecting certain sectors, notably energy and
agriculture. It can be more accurately described as a ‘consumer
economy’.

Since the US economy is also the largest economy in the world, and the
US consumer drives two thirds of the US economy, the US consumer is
also a big driver of global economic activity.

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The forces of supply and demand directly drive the price levels of goods
and services. What to produce, and how much of it is to be produced
depends on the price level fixed by the interaction of supply and
demand.

The role of government in the US economy is crucial when it comes to

decision-making regarding monetary and fiscal policies. The federal
government takes all the necessary initiatives to ensure the growth and
stability of the United States.

The US government makes full use of economic tools such as money

supply, tax rates, and credit control, among other things, to adjust the
rate of economic growth. For the most part, the US Federal Government
also regulates the operations of private business concerns in order to
prevent monopolies.

The government renders a number of direct services in the form of

providing support for national defense, monetary aid for research and
development programs, and funds for highway construction &
infrastructure in general.

The question of national debt is a controversial one within the US. At

the start of 2008, the US federal debt stood at $9.2 trillion. This is a
worrying 67% of GDP and equates to $79,000 for each American
taxpayer, a number just over 117 million people. To add to the concern,
American consumers are also increasingly dependent on debt and have
been re-mortgaging their houses to higher loan amounts, and using the
extra cash to fund high street purchases.

This debt figure is the largest in the world in absolute terms, but as a
percentage of GDP it is less than Japan and similar to several European
countries.

Most of the debt is funded by central banks and sovereign wealth funds
from Asia, Europe and the Middle East.

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The trend of the real GDP growth rate of the US economy is shown in
the following graph.

http://www.economywatch.com/world_economy/usa/

Different Sectors of the US Economy

A competitive and productive economy, the US

Economy is apparently largest in the world. It is a capitalist
economy, which registered a 2.1% GDP growth rate in the 2nd
quarter of 2008. Services form the major sectors of the US
Economy.

Services sector is the primary economic sector of USA. It contributes

nearly 67.8% towards the GDP of the country. Information, retail,
scientific, technical and professional services form the major parts of
this sector. Out of all the services, wholesale and retail trade comes up as
the leading business areas. If net income is taken into consideration, then
finance and insurance services feature as the top business option.

In 2007, the service sector contributed almost 78.5% and the industrial
sector contributed 20.5% towards USA’s GDP. The country generates a
yearly industrial output of about $2696880 million (2006 data).
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Petroleum, chemicals, fertilizers, electronic goods are some of the chief
industries of this sector. In fact, mining is also a chief industry of the US
Economy. In 2007, the production or manufacturing sector grew at a rate
of 0.3% during March. However, it recorded a positive growth rate
during the later part of the year.

Though agriculture is a major industry, yet its contribution is

only 1% towards the GDP.

Different sectors of the US Economy are listed below:

• Mining
• Finance and Insurance

• Real Estate, rental and leasing

• Manufacturing
• Wholesale Trade
• Retail Trade
• Transportation
• Information
• Management of companies & enterprises
• Utilities
• Construction
• Administrative, support, waste management & remediation service
• Educational services
• Health care & social assistance
• Arts, entertainment, & recreation
• Accommodation & food services
• Other services (except public administration)
• Professional, scientific, & technical services

http://www.economywatch.com/world_economy/usa/different-
sectors-of-economy/

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US Economic Review

According to newest US economic review for final quarter of 2008

economy of United States is slowly getting back to normal after
suffering from horrific after effects of ongoing global financial
downturn.

Latest US economic reviews have also suggested that amount of debts

owed in USA by various entities is on a downward curve. This is a
bright sign especially in context of present economic conditions.

If economic review of US is to be believed, credit markets in USA are at

present pretty weak and are lacking in amount of stability that is
necessary for them to make any concrete contribution to national
economy as such.

Economic review in US has also revealed that a decent amount of

treasury bills are being sold in order to generate money for governmental
coffers to be filled up. These are debt financing instruments that are
supposed to provide US government with money that could be used in
other economic activities.

Information provided by economic review at US has proven that

national government is increasing its level of expenditures. At present
USA, like rest of world, is going through a period of financial slump.
This financial relief, coming mostly in form of tax relief and increased
funding in certain sectors of national economy such as housing sector for
example is highly needed in these times of tremendous financial crisis.

Economic review for US has also shown that a number of moves are
being initiated by Barack Obama so that common consumers in US
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could gain some relief. It is common knowledge that a way out of
economic crisis of present magnitude is increased consumer spending.
Thus if consumers could be provided with some sort of financial
encouragement it would only be great for national economy from a
broader perspective.

Latest US economic review has shown that value of stocks have been
going down in USA. This fall has undone profits accrued by share
holders in January 2009. When trading closed on 26th February shares
of Dell went down by 3 percent as revealed by statistics collected after
trading finished during extended hours.

Loss of Dow Jones Industrial Average was 89 points, NASDAQ

Composite Index fell by 34 points, which is equivalent to 2.4 percent
and S&P 500 index went down by 2.4 percent or 34 points.

US Economic Review

According to newest US economic review for final quarter of 2008

economy of United States is slowly getting back to normal after
suffering from horrific after effects of ongoing global financial
downturn.

Latest US economic reviews have also suggested that amount of debts

owed in USA by various entities is on a downward curve. This is a
bright sign especially in context of present economic conditions.

If economic review of US is to be believed, credit markets in USA are at

present pretty weak and are lacking in amount of stability that is
necessary for them to make any concrete contribution to national
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economy as such.

Economic review in US has also revealed that a decent amount of

treasury bills are being sold in order to generate money for governmental
coffers to be filled up. These are debt financing instruments that are
supposed to provide US government with money that could be used in
other economic activities.

Information provided by economic review at US has proven that

national government is increasing its level of expenditures. At present
USA, like rest of world, is going through a period of financial slump.
This financial relief, coming mostly in form of tax relief and increased
funding in certain sectors of national economy such as housing sector for
example is highly needed in these times of tremendous financial crisis.

Economic review for US has also shown that a number of moves are
being initiated by Barack Obama so that common consumers in US
could gain some relief. It is common knowledge that a way out of
economic crisis of present magnitude is increased consumer spending.
Thus if consumers could be provided with some sort of financial
encouragement it would only be great for national economy from a
broader perspective.

Latest US economic review has shown that value of stocks have been
going down in USA. This fall has undone profits accrued by share
holders in January 2009. When trading closed on 26th February shares
of Dell went down by 3 percent as revealed by statistics collected after
trading finished during extended hours.

Loss of Dow Jones Industrial Average was 89 points, NASDAQ

Composite Index fell by 34 points, which is equivalent to 2.4 percent
and S&P 500 index went down by 2.4 percent or 34 points.
http://www.economywatch.com/economic-review/us.html

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US Economic Growth

US economy has been going through a recession. Due to

collapse of financial market and burst of housing bubble, economy of
US has been adversely affected. US’ influence over world economic
matters has naturally led to a global economic crisis, since its own
economy is going through a lean patch. Effort are always on to get US
out of recession and back to economic growth.

Weak fourth quarter

On November 6, 2008 Federal Reserve Governor Kevin Warsh said
that US economic growth was likely to be weak in fourth quarter. He
suggested that US economic growth depended on reconstruction of
financial system and not on an improvement of housing market.

July-September 2008
US economy experienced a contraction between July-September 2008.
During this period US economic growth contracted an annual rate of
about 0.3 percent to 1 percent. In August 2008, unemployment rates
reached a record high of 6.1 percent. Around 84,000 people lost their
jobs during same month.

Central bank and US Treasury

In early November 2008, US central bank cut interest rates by 0.5
percent. This was done in order to support an economy under recession.
Financial market crisis has made it necessary for central bank to ensure
that credit is available to a larger section of its economy, which is not
part of US’ financial sector. US Treasury and Federal Reserve

also have an important role in repairing US’ financial market.

Emergency liquidity funds injected by them have been somewhat useful
in improving condition of US economy
. For US to achieve economic recovery and growth, financial institutions
have to follow new models of credit.
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US economic growth: Challenges
Apart from job losses and rising unemployment, US economy has
several other challenges to cope with. Flat wage rates, people without
pension and health insurance, high family debt, are major problem areas
causing a hindrance to US economic growth. Housing and mortgage
crises have a firm grip over US economy’s growth potential for near
future. Americans have started paying more for basics such as food, fuel,
medical care, and college tuition.

ShareThis

http://www.economywatch.com/economic-growth/usa.html

US Economic Report

As per latest US economic report, national economy is depreciating at an

even faster rate. Federal Reserve has noted in its American economic
report that conditions have worsened in months of January and February
2009.

Beige Book, brought out by Federal Reserve, is an important economic

report of US. It is used for purposes of deciding on rates of interest that
operate in USA. This economic report at US has suggested that fiscal
recovery can not be expected prior to last quarter of 2009 financial year
or first half of 2010.

Latest economist report in US has confirmed that this economic

downturn has affected almost all sectors of national economy with
exception of a few. Housing markets are supposed to be an area of
concern for national economy as per new economic report for US.

As per US economic report levels of consumer spending throughout this

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country have continued to follow a downward curve. However, there are
certain districts where some amount of improvement has been observed
in January and February 2009. Consumer spending levels were
especially unremarkable during holiday season in fiscal 2008 when it
was expected that maximum amount of money would be spent.

As far as manufacturing sector is concerned US economic report

suggests that rate of decline in activities have been rather steep.
However, this is true only of a few sectors. From an overall perspective
things have been even worse for US manufacturing sector.

In their US economic report banks as well as other fiscal organizations

have made it clear that there would be additional deductions in demand
for business loans. Quality of credit accessible to families and business
enterprises has gone down a little. This has made it difficult to get loans
compared to previous times. It has also been revealed by US economic
report that in final quarter of 2008 rate of depreciation of US economy
has been 6.2 percent. This rate was more than what had been expected.

Warnings have been issued in latest US economic report that in order to

revive national economy it would be necessary for responsible
authorities to act in a forthright fashion and introduce more stimuli.
Otherwise US economy would be unable to avoid stagnation.

US Economic Report

As per latest US economic report, national economy is depreciating at an

even faster rate. Federal Reserve has noted in its American economic
report that conditions have worsened in months of January and February
2009.

Beige Book, brought out by Federal Reserve, is an important economic

report of US. It is used for purposes of deciding on rates of interest that

10 | P a g e
operate in USA. This economic report at US has suggested that fiscal
recovery can not be expected prior to last quarter of 2009 financial year
or first half of 2010.

Latest economist report in US has confirmed that this economic

downturn has affected almost all sectors of national economy with
exception of a few. Housing markets are supposed to be an area of
concern for national economy as per new economic report for US.

As per US economic report levels of consumer spending throughout this

country have continued to follow a downward curve. However, there are
certain districts where some amount of improvement has been observed
in January and February 2009. Consumer spending levels were
especially unremarkable during holiday season in fiscal 2008 when it
was expected that maximum amount of money would be spent.

As far as manufacturing sector is concerned US economic report

suggests that rate of decline in activities have been rather steep.
However, this is true only of a few sectors. From an overall perspective
things have been even worse for US manufacturing sector.

In their US economic report banks as well as other fiscal organizations

have made it clear that there would be additional deductions in demand
for business loans. Quality of credit accessible to families and business
enterprises has gone down a little. This has made it difficult to get loans
compared to previous times. It has also been revealed by US economic
report that in final quarter of 2008 rate of depreciation of US economy
has been 6.2 percent. This rate was more than what had been expected.

Warnings have been issued in latest US economic report that in order to

revive national economy it would be necessary for responsible
authorities to act in a forthright fashion and introduce more stimuli.
Otherwise US economy would be unable to avoid stagnation.

http://www.economywatch.com/economic-report/us.html
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US Economic Forecast

As per US economic forecast for financial year 2009-10, it

is being expected that Federal Reserve would deduct interest rates by 1.5
percent by end of that particular fiscal. This deduction would mean that
there would be two deduction of 25 basis points each. Federal Reserve is
also expected to introduce measures that provide more liquidity to
various financial markets.

According to economic forecast for US, Federal government is also

expected to introduce a fund, useful for retrieving distressed properties,
which otherwise would be harmful for financial organizations.

Economy forecast US says that real gross domestic product is supposed

to grow at a lesser rate in financial year 2009-10. Much of this could be
attributed to current adjustments being made in housing market sector
and credit crunch that is facing US at present. This is also supposed to
have an adverse effect on US exports for that financial year.

However, there are certain positives to emerge in that particular financial

year as well. Average consumer price inflation is supposed to decrease.
Much of this would result from falling commodity prices and
weaknesses in domestic demand in US.

Financial experts are expecting that United States dollar would

increase in value during that financial year. However, there is not too
much cause for optimism as any increase would only be moderate. They
are also of opinion that present levels of current account deficit would
go down to 2.3 percent of gross domestic product. Much of this is being
credited to lessening of deficit in merchandise trade.

Barack Obama, the next US President is expected to usher in a new era

in American economics by introducing measures that are supposed to
help this country get back on its feet as far as economy is concerned.
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Federal Reserve has slashed its predictions for financial year 2008-09 in
wake of tremendous economic recession that has hit this North
American country and has claimed several well known financial
institutions such as Lehman Brothers.

http://www.economywatch.com/economic-forecast/world-
economic-forecast/usa.html

US Economic Development

With per capita GDP of $48,000, as estimated in 2008, US have

strongest and largest economy of world. US economic development also
includes GDP as per official exchange rate, which is estimated to be
$14.33 trillion. Real growth of GDP, as was found for year 2008, was
1.4%. All these factors point to good economic development in US.

Economic development of US is also marked by contribution from

different sectors of national economy. Contribution to GDP by
agricultural sector was 1.2%, while contribution by industrial sector was
19.6% for fiscal year 2008. Service sector of US economy contributed
79.2 percent to national GDP as was recorded in 2008.

US Economy is technologically powerful and is a market oriented

economy, where most decisions are taken by private individuals and
business firms. Business firms of US experience greater flexibility as
compared to their compatriots in Western Europe and Japan. US
economic development focuses on new products. In field of
technological advances, mainly in computers, aerospace, medical and
military equipment, US has shown great development in recent years.
Technological power of US helps greatly in US economic development.

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It has been recorded that since 1975, there has been increase in
household income, which has gone up to 20%. Though there were some
upheavals in country, they were not enough to affect overall gross
domestic

product of US. A war raged in March-April 2003 between US and Iraq

and nation also survived serious damage caused by Hurricane Katrina in
2005. Though these had no effect on GDP, yet there were problems
including fast growing medical and pension costs of an aged people,
insufficient investment in economic infrastructure, considerable trade
and budget deficits and stopping of family income in lower economic
groups.

Trade deficit figures reached $847 billion mark in 2007, which came
down to $810 billion in 2008. Exchange rate for dollar was also affected.
There was a global crisis, which is still faced by nations all over world
in form of global economic recession, bank failures, decrease in home
prices and tight credits. In order to even out financial market condition, a
$700 billion Troubled Asset Relief Program (TARP) was formed by US
Congress in October, 2008. New president of US, Barack Obama will
provide an extra $825 billion economic incentive package.

http://www.economywatch.com/economic-development/us.html

Canada Economy

Canada extends from the Atlantic Ocean to the Pacific

Ocean and northward into the Arctic Ocean. It is the second largest
country in size in the world and shares its border with the United States
of America.

Canada’s economy is a mixed economy and the country is one of the

most important suppliers of agricultural products. The Canadian Prairies
14 | P a g e
are one of the biggest contributors of wheat and other grains. Atlantic
Canada has vast deposits of natural gas and oil as well. Canada is the
biggest producer of zinc, uranium and is a big source of global gold,
nickel, lead and aluminum.

After witnessing solid economic growth between 1993 and 2007,

Canada’s economy went into a severe recession in 2008. Consequently,
the country recorded its first-ever fiscal deficit in 2009. Canada’s
conservative lending practices have, however, enabled its banking
segment to recover fast and emerge stronger from the global financial
crisis.

Canada Economy: GDP

Although the services segment contributes nearly two thirds of Canada’s

GDP, manufacturing, especially the automobile industry, also plays a
significant role in the country’s economic growth. The country’s
services segment includes retail, communication, real estate, financial
services, health and education (both under the government’s purview),
entertainment, technology and tourism.

The proportion of Canada’s GDP devoted to agriculture has declined

significantly, but the nation still remains one of the biggest exporters of
agricultural products, including wheat and grains, to the US, Europe and
East Asia. Low labor costs, a publicly funded health care system and a
highly educated population have attracted several American and
Japanese automobile majors to set up their manufacturing plants in
Central Canada.

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Canada Economy: Resources

One of the wealthiest nations in the world, Canada’s considerable

natural resources allow it to play a significant role in international trade.
Canada’s economic profile is quite similar to that of the United States, as
reflected in its market-oriented economic system.

Canada’s natural resources are spread across its various regions. While
the oil industry is important in Alberta, Newfoundland and Labrador,
Northern Ontario houses a large number of mines of coal, copper, iron
ore and gold. The British Columbia region is famous for forestry, while
the fishing industry is quite strong in the Atlantic Provinces.

Canada Economy: Trade

Canada’s biggest trading partner is the US. Here are some important
trade related facts about Canada:

• Nearly 80% of its exports are to the US

• Over 65% of Canada’s imports are from the US
• Canada is the largest foreign supplier of energy to the US
• The national electricity grids of the two countries are linked
to each other
• The commodity sector is the largest trade component

In addition, the US is the largest foreign investor in Canada, with

investments primarily targeted at the latter’s mining, smelting,
petroleum, chemical and machinery segments.

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Canada Economy: Key Statistics

Here are some key statistics, according to the 2009 estimates

• GDP (real growth rate): -2.4%

• Unemployment rate: 8.5%
• Consumer Price inflation : 0.2%

G20

Canada is a member of the G20.

http://www.economywatch.com/world_economy/canada/

Canada Economic Structure

One of the wealthiest nations of the world, Canada is a

member of the Organization of the Economic Cooperation and
Development (OECD) and the G-8. Like all other developed nations,
Canada’s economy is dominated by the service sector. One of the few
nations in the world to be a net exporter of energy, Canada finds its
place amongst the top ten trading nations in the world.

Canada Economic Structure: GDP Composition

Nearly 70% of Canada’s Gross Domestic Product (GDP) is

contributed by its service sector, which employs over 75% of the
country’s population. The country’s agriculture sector contributes only
2% of the GDP, employing a similar proportion of its people.

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The North American nation’s industry contributes nearly 28% of its
GDP, while employing around 27% of its population. The country’s
services segment includes retail, communication, real estate, financial
services, health and education entertainment, technology and tourism. A
large portion of the country’s natural resources, including oil, gold,
nickel and uranium and agricultural products like wheat and other
grains, are exported to the US, Europe and East Asia.

Canada Economic Structure: Resemblance to the US

Canada resembles the US in its market oriented economic system,

pattern of production and affluent living standards. The impressive
growth of Canada’s manufacturing, mining and service segments since
World War II have transformed the North American nation from an
agrarian economy to one with a highly industrial and urban economic
structure. Low labor costs and a comprehensive healthcare and social
security system have attracted automobile majors from the US and Japan
to set up manufacturing facilities in Canada.

Canada’s trade and economic integration with the United States has
witnessed a dramatic increase, following the signing of the 1989 US-
Canada Free Trade Agreement (FTA) and the 1994 North American
Free Trade Agreement (NAFTA). The US is Canada’s largest trading
partner, besides being its largest foreign investor through investments in
mining, smelting, petroleum, chemical and machinery segments. This
has linked the Canadian economic policy even more to the United
States. Even a minor change in the US interest rates has repercussions in
Canada.

One important distinction between the economic structures of Canada

and the US is that the former is a net exporter of commodities while the

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latter is a net importer. Canada’s banking segment is also quite
conservative in comparison to the United States.

http://www.economywatch.com/world_economy/canada/structure-
of-economy.html

Canada Economic Stimulus

About Canada economic stimulus

As per reports of 15th December, 2008 shipbuilding is going to be an
important part of Canada economic stimulus package.

An important and rather interesting aspect of this economic stimulus

Canada package, is that money is not being spent on new projects but
ones that have been in pipeline for some time now.

Main purpose behind this entire project is to create sources of

employment opportunities that is not affected by ups and downs of an
economy, but is highly effective and is able to win recognition and
appreciation as well.

As per reports, a certain part of economic stimulus would be taken from

funds that have been set aside for building navy supply ships,
icebreakers and patrol boats.

However, there are certain teething problems in this case. Success of this
plan is dependent on issues like settling of internal differences and
disputes by shipbuilding organizations and various trade unions across
Canada. Defence Minister of Canada, Peter MacKay, has also expressed
his opinion that these trade unions and shipbuilding companies would
have to come and share this work, which is worth billions of dollars.

19 | P a g e
 Peter MacKay has said that these entities have sufficient
employment opportunities to provide jobs to people in coastal areas as
well as Quebec area. He opines that amount of work in this sector of
Canadian economy is good enough for it to survive and do well in
these tumultuous economic climes.

According to him this sector would act as an economic stimulus for

Canada. Main reason behind this belief is that this sector is helping
people get jobs. Since there is good enough volume of work in all these
projects he expects that shipyards of Canada would be brimming over
with employees. He says that this would help in bringing about a
shipbuilding program that would continue as an important source of
income and employment in days to come.

http://www.economywatch.com/economic-stimulus/world-
economic-stimulus/canada.html

Canada Economic Report

Canada is likely to experience high economic growth,

even when a global economic crisis is affecting most economies of
world. Global organizations like International Monetary Fund have
predicted positive growth figures for Canada economy in 2009. Canada
economic report gives a better picture of this nation's economy.

Canada GDP, exports and imports

From years 2005-2008, Canadian economic growth rate hovered around
2.4 percent. For two consecutive years, 2007 and 2008, Canada gross
domestic product was estimated to be about 2.7 percent. Canadian
exports have been registering growth figures for over 5 years. GDP
breakup of Canadian exports were as follows: agriculture- 2.1 percent,
industry- 28.8 percent, and services- 69.1 percent.

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In 2008, according to Canada economic report, exports had increased by
8.76 percent to reach $440 billion. US, like always, was major export
partner for Canada. Total Canadian imports had risen to about $390
billion, a rise of about 11.66 percent over previous year.

Inflation, unemployment in Canada

Canada economic report reveals that average inflation rate (consumer
prices) was about 2.40 percent in 2008. That was an increase of around
0.4 percent from inflation rate in 2007. According to 2007 CIA
estimates, unemployment rate in Canada was likely to be around 5.90
percent, a decrease of about 0.50 percent from previous year average of
6.40 percent.

Coping with global economic slowdown

Canadian government has to adopt strong measures to protect their
nation from global economic crisis. A current account deficit coupled
with a growing government fiscal deficit have contributed to slowdown
of Canada's economy. Tax cuts have to be introduced to prevent
Canada's economy from being affected by global economic crisis.
Services sector of Canada continues to be a major force in propelling
Canadian economy, even in times of global financial crisis. It remains to
be seen if Canada will be able to maintain its high rate of economic
growth in 2009.

http://www.economywatch.com/economic-report/canada.html

Canada Economic Review

As per latest Canada economic review Jim Flaherty, finance minister of

Canada, has expressed great concern over present state of national
economy. As per his estimates an economic stimulus package of $3
billion has to be provided so that Canadian economy can get back on its
21 | P a g e
feet again.

Of late Canadian economic reviews have shown that as per report of

Statistics Canada regarding gross domestic product, national economy
has gone down to a significant extent as far as final quarter of 2008
fiscal is concerned.

According to information from latest economic review of Canada, Jim

Flaherty has reiterated that some amount of financial influx has to be
channeled into Canadian economic system. Until and unless that is done
Canadian economy would continue to experience such hardships.

It has been confirmed by latest economic review in Canada that Jim

Flaherty has asked for permission from Canadian parliament regarding
spending $3 billion that has been allotted in stimulus section of national
budget. He has expressed his desire to be able to spend this money from
1st of April 2009 when new financial year kicks off in Canada.

Economic review at Canada by noted economists has suggested it might

be a move fraught with risks and possibilities of mistake. However, Jim
Flaherty has said that it would be too late if Canadians had to wait for
usual procedures to be executed before any kind of financial relief was
provided.

Latest economic review for Canada has revealed that reports by two
major banks of Canada – National Bank and Bank of Montreal - have
predicted that economy of Canada would be able to recover itself from
second financial quarter of fiscal 2009 onwards.

As per Canada economic review and reports these two banks have cited
a number of factors that may help Canadian economy get back on its
feet. Major factors in this case are reductions in rates of taxation all over
world, a slew of economic stimulus packages, a revival of weakened
housing sector of United States of America and depreciation in value of
22 | P a g e
Canadian dollar.

In another Canada economic review Douglas Porter who is deputy chief

economist with BMO Capital Markets has said that Canada is in a better
position to adapt to effects of global economic downturn as it had
reacted early to this world economic crisis through early financial
stimuli and cuts in rates of interest.
http://www.economywatch.com/economic-review/canada.html

Canada Economic Growth

As per predictions of Bank of Canada, which is an apex banking

organization of Canada, there are ample opportunities of Canada
economic growth from third quarter of 2009 fiscal. However, in first
couple of quarters of 2009 chances of Canadian economic growth are
remote as national economy would be feeling aftereffects of ongoing
global recession.

As per Monetary Policy Report of Bank of Canada, in final quarter of

2008 fiscal economy of Canada contracted at a rate of 2.3 percent.
Chances of economic growth of Canada would not be properly placed
when judged in context of projected reduction of Canadian economy in
first quarter of 2009 at a rate of 4.8 percent.

Bank of Canada also does not see any possibility of economic growth in
Canada in second quarter of 2009 fiscal as has been proven by its
projections of a reduction of Canadian economy at a rate of 3.8 percent.

Bank of Canada has however projected a rate of 2 percent economic

growth at Canada in third quarter of 2009 fiscal. It tips that in final
quarter of 2009 fiscal this rate of growth for Canadian economy would
reach 3.5 percent mark.
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Bank of Canada has expressed optimism in fact that when usual
economic conditions return to Canada there would be sufficient amount
of Canada economic growth. It is expected that various financial stimuli,
which are results of economic policies of government, would help
restore parity. As a result of this monetary boost consumer expenditures
would go up in 2010 fiscal, which would ultimately help in economic
growth for Canada. All this would help in Canada economy grow at a
rate of 3.8 percent in 2009.

Bank of Canada is optimistic that economic recovery would be quicker

than what was case in recessions that took place in 1981-82 and 1990-
92. However, these expectations are primarily brighter than what is
happening around world. Much of this could be attributed to muted
economic recoveries that are supposed to take place in few other
economies at that point of time.

Previously Bank of Canada had predicted that in 2009 rate of Canada

economic growth would be 0.6 percent and in 2010 it would be 3.4
percent during October 2008.

http://www.economywatch.com/economic-growth/canada.html

Canada Economic Forecast

Organization for Economic Co-operation and

Development, popularly known as OECD, cut its projection figures for
Canada's economy by half in June, 2008. OECD had also suggested
more cuts in interest rate for Canada, in order to negate adverse effects
of economic slowdown in United States of America.

Canada economic forecast (2009)

OECD maintained that Canadian economy is likely to remain down till
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spring of 2009. But they downplayed any suggestions of a recession for
Canada's economy. According to this Canadian economic forecast,
problematic areas would be current account deficit and government
fiscal balance deficit. As tax cuts and business cycles are likely to hurt
revenues earned by government, current account and fiscal deficit can be
expected to plague Canada.

Canada's gross domestic product

In 2008, OECD expected Canada's gross domestic product to rise by 1.2
percent. That would be a 1.5 percent decrease over previous year figure
of 2.7 percent. It would also be less than OECD's Canada economic
forecast of 2.4 percent, made earlier in December, 2007. But Canada
GDP is predicted to rise by 2.0 percent in 2009.

Conference Board of Canada

Conference Board of Canada carries out economic forecasting, modeling
and analysis, and its expertise in such areas of economic work has been
recognized as most accurate by Canadian Public Policy Journal. A
percentage increase of 2.2 percent in Canada's GDP at market prices has
been predicted for 2008. Conference of Board of Canada also put GDP
growth percentage to be around 3.0 percent for 2009.

As per Canada economic forecast made by Conference Board of Canada,

rise in employment is likely to be 1.4 percent in 2008, less from 2.3
percent in 2007. It is further predicted to dip to 0.7 percent in 2009.

Royal Bank of Canada economic forecast

According to a report released in December 2008, Royal Bank of
Canada expected Canada's economy to enter into recession. An average
growth percentage of 0.3 percent was predicted for Canada in 2009.
Slump in commodity prices will pose a major challenge to Canada's
economic growth.

http://www.economywatch.com/economic-forecast/world-
economic-forecast/canada.html
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Canada Economic Development

There are a number of organizations that are working

for Canada economic development. They include Atlantic Canada
Opportunities Agency, Federal Economic Development Initiative in
Northern Ontario (FedNor), Canada Economic Development for Quebec
Regions, Strategis - Industry Canada, Enterprise Cape Breton
Corporation and Western Economic Diversification Canada.

Atlantic Canada Opportunities Agency

Atlantic Canada Opportunities Agency performs in conjunction with
communities and businesses in order to introduce increasing levels of
innovation, competitiveness and productivity in Canadian economy.

Canada Economic Development for Quebec Regions

Canada Economic Development for Quebec Regions strives to improve
economic conditions prevailing in various parts of Quebec. It serves
business enterprises, organizations and communities across this region
through its 14 offices locations in this province.

Enterprise Cape Breton Corporation

Enterprise Cape Breton Corporation is a major organization that is
working towards economic development of Canada. It is involved in a
number of areas like e-commerce, properties as well as several other
economic programs.

Federal Economic Development Initiative in Northern Ontario

(FedNor)
Federal Economic Development Initiative in Northern Ontario (FedNor)
is a federal body that is responsible for regional economic development
of Ontario. It functions along with a variety of partners and plays
different roles ranging from catalyst to facilitator. It tries to create a
business environment that can assist business establishments to grow
and perform to fullest of their capabilities.
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Strategis - Industry Canada
Strategis - Industry Canada is a leading developmental organization of
Canada that works to uplift economic conditions in that country. It
works across various sectors and helps other organizations as well.

Economic development in Canada

Pattern of economic development in Canada has been unusual compared
to other economically advanced countries. Agricultural sector of Canada
has always been at the forefront compared to other sectors like
manufacturing and services.

Economic development in Ontario

Ontario is among leading Canadian provinces with respect to economic
prosperity. There are a number of industries, real estate for example, that
have been flourishing for a significant amount of time now. Economic
development in Ontario has been possible due to impressive
infrastructural facilities in this state.

http://www.economywatch.com/economic-
development/canada.html

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