Harbourwalk condos.The house price bubble burst. This winter, there have been extremely low temperatures in many parts of North America, and temperatures of more than minus 30 degrees Celsius have turned Canada into an “frozen country”, but unexpectedly, along with the roads are frozen, there is also the Canadian economy.Please Visit: Harbourwalk condos to Get Your VVIP Registration Today!
In the face of severe cold, Canadians may still be able to rely on the “Canadian goose” to survive, but in the face of the economic winter, no matter how thick the “Canadian goose” can not make people feel warm.
On March 1, local time, Statistics Canada released the country’s economic data for the fourth quarter of 2018: Canadian GDP grew at an annualized quarter-on-quarter rate of 0.4% in the fourth quarter of 2018, much lower than the previous value of 2%, and 1% lower than expected, and the slowest growth rate in two years. For the whole year, GDP grew 1.8 per cent, down 40 per cent from 2017.
Among them, the same and month-on-month growth rates of GDP in December were both lower than expected, with a sharp decline from the previous value of 1.1 per cent year on year, and negative growth for the second month in a row compared with-0.1 per cent.
In fact, Canada’s economy has been stuck in a quagmire for years, but economists are surprised by such poor economic data.
According to the World Bank, Canada’s GDP was $1.843 trillion in 2013 and only $1.653 trillion in 2017. While the world’s major economies are slowly recovering, Canada’s economy is in recession.
According to data released by Statistics Canada, the biggest drag is total fixed capital formation, of which investment in residential construction fell 14.7%, the biggest decline since 2009. Investment in housing fell by 3.9%, investment in new housing by 5.5%, investment in decoration by 2.7%, and ownership transfer costs by 2.6%.
The decline in exports is also an important drag on the economy. Canadian exports fell 0.1% in the fourth quarter, and the ratio of export to import prices fell 3.6%, the biggest drop in trade since 2009. The export prices of crude oil and asphalt fell particularly sharply, reaching 34.3%.
Lower export prices caused Canada’s real gross national income (GNI) to fall by 1.0 per cent, the biggest drop in the indicator in five years.
Growth in Canadian household spending slowed for the second consecutive quarter, rising 0.2 per cent in the fourth quarter, down 0.1 percentage points from 0.3 per cent in the third quarter. Of this total, expenditure on services increased by 0.5%, life insurance and financial services increased by 0.9%, while expenditure on goods fell by 0.2%. Durable goods fell 0.5 per cent, mainly due to a 0.6 per cent reduction in motor vehicle consumption. Spending on semi-durable goods fell 0.3%, while non-durable goods were the same as in the third quarter.
The economic downturn has had a greater impact on the lives of Canadians than the cold. Especially Canadians who are accustomed to “overspending”.
Over the past few decades, a major economic feature of Canada has been high debt, and people’s well-off lives tend to rely on the borrowing habit of spending in advance. The endless debt deficit underpins Canada’s economy.
At the end of the second quarter of 2018, 70% of Canadian households had $1.77 in debt when they had a disposable income of $1, according to Statistics Canada. By the end of the third quarter, that figure had risen to $1 to $1.78, which, of course, included all credit card and mortgage debt.
At present, Canada’s household debt is equivalent to 101% of GDP, the highest in the world. By contrast, the US household debt-to-GDP ratio is less than 80 per cent, while Germany and France have a household debt-to-GDP ratio of 60 per cent. For 30 years, Canadian households have been steadily increasing their debt, and living on credit has become a way of life. Canadians have debts of more than $2 trillion, most of which are mortgages.
Advance consumption may be sustained when the economy is good, but once the economy stagnates, debt becomes a trap that can’t get out.