GDP of Canada

The performance of the Canadian economy is heavily dependent on trade and commodity prices. The economic landscape began to deteriorate considerably in 2020. The pandemic weighed on the country's industrial activity in Q1, disrupting global supply chains and demand as it has spread globally. To make matters worse, Saudi Arabia announced it would slash prices and increase production of oil in response to Russia refusing to lower output in response to the decline in energy demand. While OPEC+ agreed to production cuts starting in May, oil prices fell precipitously to single-digits on fears of storage running out. With job losses breaking records and curtailment of large swaths of the economy having lasted for months, GDP declined 5.0% in 2020. With a vaccine for the coronavirus having arrived at the end of 2020, the long-term effects of the outbreak are expected to be muted, particularly as there was a rapid rebound in economic activity in 2021.

Furthermore, the ongoing war in Ukraine that began in March 2022 has resulted in global sanctions against Russia, impeding global trade activity. Despite government support programs bolstering household recovery, ongoing uncertainty in 2022 stemming from the war, raising inflation and new variants of the virus is anticipated to stifle large growth in 2023. The Bank of Canada has halted rate hikes as inflation shows signs of slowing down. However, the lagged effect of the rate hikes manifests in the form of reduced consumer spending and slashed business investment. Uncertainty surrounding tariffs threaten growth. As such, GDP is estimated to increase by 1.6% and 1.2% in 2024 and 2025, respectfully.