Our best spreads and conditions
Learn more
Forex News
Back
May 9, 2013
Forex Flash: Can the US lift Canadian growth? - Nomura
FXstreet.com (Barcelona) - Nomura economist Charles S-Arnaud wonders whether the US can lift Canadian growth.
He begins by commenting that a lot of hope is being place on a revival of Canadian exports to support economic growth this year and next year, driven by an acceleration in US economic growth over that period. However, he adds that declining trade links with the US and dismal competitiveness likely means that the elasticity of Canadian exports to US growth has likely declined over the past decade. On that note, he writes, “it is interesting to point out that exports volume to the US peaked in 2005, well before the recession. As a result, we think that the contribution to Canadian growth from exports will likely be weaker than some expect and that growth for 2013 is unlikely to be much higher than potential.”
He begins by commenting that a lot of hope is being place on a revival of Canadian exports to support economic growth this year and next year, driven by an acceleration in US economic growth over that period. However, he adds that declining trade links with the US and dismal competitiveness likely means that the elasticity of Canadian exports to US growth has likely declined over the past decade. On that note, he writes, “it is interesting to point out that exports volume to the US peaked in 2005, well before the recession. As a result, we think that the contribution to Canadian growth from exports will likely be weaker than some expect and that growth for 2013 is unlikely to be much higher than potential.”