Right now, Canada is currently showing signs of reaching a recession, but remains at the peak of prosperity. As of June 2017, Canada has been residing in an expansion phase in which people saw the GDP grow to 3%, and the industrial capacity utilization rate jump to 86%.
However, a slow start to this is putting Canada at risk of their estimated 2.5% GDP growth. Exports have been hit hard by plant shutdowns in the auto sector, as well as having some ongoing troubles with the Keystone pipeline which has restrained good sector output. Also, hints of a deceleration in business investment spending have been made due to the decline in imports of machinery and equipment in January.
There is expectancy of temporary restraining factors during this
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Canada’s debt is being watched closely for signs of trouble. The Bank for International Settlements published a report on the incoming signs of a banking crisis, to which they singled out Canada as a country at risk. The Royal Bank of Canada said that Canada’s economic growth was expected to slow this year, somewhat because of the household banks. Credit cards are lacking supporting collateral and are also having a lower repayment priority than residential mortgages or auto loans. So, credit card loan losses tend to be more severe than other forms of consumer lending. In home loans, borrowing money has moved to uninsured mortgages, and almost half of overdue mortgages will have an interest rate reset in the year. That will increase the tension on households debt-servicing capacity. Real estate agents and brokers have seen their production drop by 13% since January, as many people rushed at the end of 2017 to buy homes. (See Figure 2 to see how credit is growing) This ended up inflating the transaction numbers for December but reducing them for January. Nonetheless the Bank of Canada has forecasted the inflation growth to average 2.0% in 2018 and 2.1% in