Research Briefing | Dec 13, 2021

Canadian 2022 Themes: Economic recovery delayed not derailed

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Canada’s full economic recovery from the pandemic has been delayed, not
derailed. The economy continues to benefit from reopening amid high
vaccination rates, but it is being hit by supply disruptions exacerbated by
floods in BC, rising cost pressures, and resurgent health concerns as the
Omicron variant ushers the pandemic into a new year.

As of Q3 2021, real output was still 1.4% below its pre-virus level and around 5% below its pre-pandemic trend. Even with 4.3% GDP growth pencilled in for next year, the economy won’t return to its pre-Covid trend in 2022.

What you will learn:

  • The economy as of Q3 2021 was still 1.4% below its previrus level and around 5% below its pre-pandemic trend. Further, we don’t expect the economy to get back to its previrus trend in 2022, even with our forecast for strong 4.3% GDP growth.
  • A sustained health recovery is the foundation for a sustained economic recovery.
  • Planned public capital investments and delayed spending of excess savings by households will also add to growth, while housing investment eases further from unsustainable highs and pandemic income support comes to an end.
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