On the whole, the world economy has enough momentum at present to absorb the crosswinds of Europe’s fiscal crises. Though growth is uneven across the major economic regions, we expect global growth of about 4% in 2010.
After the worst recession since the 1930s, oxygen from public stimulus programs has helped the U.S. private-sector economy gradually get back on its feet. We expect U.S. growth to remain strong over the rest of 2010 and then be slowed in 2011 by the drag of federal deficit reduction.
Canada’s economic growth is currently the strongest in the G-7. Domestic demand has passed the pre-recession peak and is now in an expansion phase. At this rate, excess capacity will be absorbed within two or three quarters. The Canadian expansion is likely to remain strong through the rest of this year and then slow next year in response to U.S. fiscal austerity.
