The Canadian Press
Friday, January 03, 2003
The Canadian Chamber of Commerce expects the economy to grow 3.2 per cent this year, ahead of other major industrialized economies and predicts that the Canadian dollar will rise to 67 cents U.S. by the end of the year.
While the Canadian economy is poised for another good year, in line with the 3.3-per- cent growth estimated for 2002 and more than double the 1.5- per-cent growth in 2001, it warned of some risks ahead.
They include a delay in the economic recovery in the U.S., possible military action against Iraq and the impact of the Kyoto Protocol, which commits Canada to reduce its output of greenhouse gases.
"Concern about these risks is clouding the outlook for the Canadian economy in 2003," said chamber president Nancy Hughes Anthony.
The Canadian dollar is often hurt in times of unrest, as investors seek shelter in more powerful currencies, notably the U.S. dollar. The dollar hasn't closed above 67 cents since September 2000; it closed up 0.42 of a cent, to 63.81 cents yesterday, after last week's decline.
But the chamber said there are reasons to be optimistic:
- Consumer spending on services will pick up as spending slows on durable goods.
- Corporate profits are expected to improve and spending on machinery and equipment might rise.
- Exports should benefit from a firmer U.S. economy.
"We expect that the Canadian economy will continue to lead the G-7 economies in terms of growth in the coming year," Ms. Hughes Anthony said.
The chamber expects the Bank of Canada to keep interest rates steady until spring, then raise them by 1.25 percentage points by the end of the year.
The spread between Canadian and U.S. interest rates is expected to expand, lending support to the Canadian dollar, which the chamber said will appreciate to 67 cents U.S. by the end of 2003.
A year ago, the Canadian Chamber of Commerce predicted growth of 1.2 per cent in 2002, barely one-third the year's actual expansion.
Friday, January 03, 2003
The Canadian Chamber of Commerce expects the economy to grow 3.2 per cent this year, ahead of other major industrialized economies and predicts that the Canadian dollar will rise to 67 cents U.S. by the end of the year.
While the Canadian economy is poised for another good year, in line with the 3.3-per- cent growth estimated for 2002 and more than double the 1.5- per-cent growth in 2001, it warned of some risks ahead.
They include a delay in the economic recovery in the U.S., possible military action against Iraq and the impact of the Kyoto Protocol, which commits Canada to reduce its output of greenhouse gases.
"Concern about these risks is clouding the outlook for the Canadian economy in 2003," said chamber president Nancy Hughes Anthony.
The Canadian dollar is often hurt in times of unrest, as investors seek shelter in more powerful currencies, notably the U.S. dollar. The dollar hasn't closed above 67 cents since September 2000; it closed up 0.42 of a cent, to 63.81 cents yesterday, after last week's decline.
But the chamber said there are reasons to be optimistic:
- Consumer spending on services will pick up as spending slows on durable goods.
- Corporate profits are expected to improve and spending on machinery and equipment might rise.
- Exports should benefit from a firmer U.S. economy.
"We expect that the Canadian economy will continue to lead the G-7 economies in terms of growth in the coming year," Ms. Hughes Anthony said.
The chamber expects the Bank of Canada to keep interest rates steady until spring, then raise them by 1.25 percentage points by the end of the year.
The spread between Canadian and U.S. interest rates is expected to expand, lending support to the Canadian dollar, which the chamber said will appreciate to 67 cents U.S. by the end of 2003.
A year ago, the Canadian Chamber of Commerce predicted growth of 1.2 per cent in 2002, barely one-third the year's actual expansion.
