There are no shortages of forecasts for 2012 from economists, investment firms and even journalists (God help us). Bank of Nova Scotia published its economic and market outlook for the year ahead on Wednesday, forecasting that both Canada and the U.S. will struggle to achieve growth of 2 per cent.
The scene is even worse in Europe, where some countries will manage to squeeze out gains, but overall growth will be non-existent in the euro zone, according to Scotiabank chief economist Warren Jestin.
Emerging markets are delivering about two-thirds of the world’s growth right now, a trend that will likely continue, albeit at a slightly slower pace. Chinese growth next year will be around 9 per cent, down a fraction from this year. But both India and Brazil should notch up gains.
The best news here seems to be that emerging economies will continue to have a healthy appetite for Canadian resources, Mr. Jestin says.
It will be a different story for Canada’s manufacturing sector, however, which will continue to struggle with the strong loonie and soft markets in the U.S. and Europe.
And Canadians will be a more frugal lot. “Household spending gains will be dampened by a moderation in job creation and greater caution in taking on additional consumer debt, now at record levels relative to disposable income,” he writes.
The silver lining around the global malaise is that Canada will remain one of the best places to live and do business in the year ahead. Interest rates will stay at current generational lows, Ottawa will remain on course to balance its budget deficit by 2017 and the country has already regained the jobs it lost during the recession, Scotiabank says.