EDC Economic Commentary: Recent Episodes
Export Development Canada
Canadian direct investment abroad (CDIA) and the rise of Canada’s foreign affiliates creates stable and long-lasting links between economies, strengthening international economic integration and providing access to global markets, allowing companies to grow their international presence and business.
To know more: https://go.edc.ca/trade-insights_pod
Did you know that our second-largest partner is the European Union? While still under provisional application, Canadian businesses have enjoyed preferential access to this affluent market since September 2017, thanks to the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).
To know more: https://go.edc.ca/trade-insights_pod
EDC’s biannual Trade Confidence Index (TCI) survey improved to 70.1 index points this spring—continuing the volatile trend of the last four years. Despite the seemingly endless challenges facing the world and global trade, prospects of a resurgence in economic activity buoyed Canadian exporter sentiment since our last survey, released in December 2023.
To know more: https://go.edc.ca/trade-insights_pod
The world economy is expected to continue showingremarkable resilience, notwithstanding myriad risks challenging businesses today. What’s more, elevated levels of uncertainty are keeping competition on the sidelines, making it easier for those who do their due diligence and pay attention to their scenario analyses to find value.
To know more: https://go.edc.ca/trade-insights_pod
In our latest Global Economic Outlook, we forecast a smooth but uninspiring ride through this year, with the global economy expected to grow by just 2.9%, with more optimism for next year, as lower interest rates and the normalization of activity help leave the post-pandemic economy behind.
To know more: https://go.edc.ca/trade-insights_pod
While the energy transition isn’t a linear process, Canadian oil producers need to make the investments necessary to help lower costs, add value, improve carbon productivity and leverage existing processes to build a bridge toward it.
To know more: https://go.edc.ca/trade-insights_pod
The unprecedented number of elections this year comes amid heightened geopolitical uncertainty. Canadian exporters should keep a close watch on the policy environment.
To know more: https://go.edc.ca/trade-insights_pod
Small- and medium-sized enterprises (SMEs) are pivotal toCanada’s trade success, yet in a world where we expect to see a surge in climate-focused regulations, this critical segment is underequipped to reduce their carbon emissions, with main challenges being cost considerations and staffing limitations.
To know more: https://go.edc.ca/trade-insights_pod
Supply chain woes are back. Just as the global economyappears to be getting past the effects of pandemic-era disruptions, Iranian-backed Houthi rebels have mounted more than 30 attacks on ships passing through the Red Sea. Will the challenges in this vital waterway substantially impact Canada?
To know more: https://go.edc.ca/trade-insights_pod
According to our latest Trade Confidence Index (TCI), confidence fell across all regions of the country. While all components of the index dropped, domestic economic conditions and domestic sales posted the sharpest declines in our biannual survey.
To know more: https://go.edc.ca/trade-insights_pod
In our latest Global Economic Outlook, we expect central banks tocut rates, with a gaze firmly fixed on inflationary trends. The Bank of Canada, the U.S. Federal Reserve, and the European Central Bank will begin cutting this year, but it’ll take them well into 2025 to get policy rates to their neutral levels—the point at which rates neither help nor harm economic activity.
To know more: https://go.edc.ca/trade-insights_pod
December is traditionally a time for forecasters to take stock of the year that was; celebrate the good calls, more commonly account for the bad ones and sharpen our focus on what it all means for the years ahead.
To know more: https://go.edc.ca/trade-insights_pod
Geopolitical uncertainty has always been a concern forCanadian exporters doing business abroad. How can businesses measure and convert these risks intocosts that help better inform decision-making?
To know more: https://go.edc.ca/trade-insights_pod
Boosting Canadian competitiveness, promoting cleantechentrepreneurship and supporting startups that are experimenting with nascent technologies is essential for Canada’s cleantech sector to be successful.
To know more: https://go.edc.ca/trade-insights_pod
Despite a challenging year, the Indo-Pacific remains an important engine of global growth. There is one US$1.7 trillion economy that stands as a crucial foundation to the region’s economic architecture, and a key market for growing Canadian trade opportunities. Welcome to the Republic of Korea (ROK)!
To know more: https://go.edc.ca/trade-insights_pod
The impacts of central bank rate increases are finally hitting home in a real way in North America, Europe, and across other major economies. Could the global economy grow by a not-too-hot-not-too-cold number?
To know more: https://go.edc.ca/trade-insights_pod
Indonesia is already Canada’s largest ASEAN trading partner, with Canadian exports skyrocketing 45% last year. We have also recently opened a regional office in Jakarta. Regardless of the sector, the demand from Indonesia is here, for those Canadian companies willing and able to supply it.
To know more: https://go.edc.ca/trade-insights_pod
Amidst all the geopolitical noise, the U.S. dollar still dominates foreign exchange trades, accounting for more than half of international payments and almost 85% of all trade finance transactions. Will Canadian exporters have to adapt if things change going forward?
https://go.edc.ca/trade-insights_pod
Policy-makers in the European Union (EU) recently agreed to implement the world’s first carbon border adjustment mechanism (CBAM), aimed at contributing to global decarbonization efforts. So, what does this mean for Canadian exporters?
https://go.edc.ca/trade-insights_pod
We are sharpening our focus to break down the latest trade developments, explain why they matter to Canada, and help more Canadian companies thrive in international markets. Welcome to Trade Matters.
https://go.edc.ca/trade-insights_pod
According to analysis in our Country Risk Quarterly, a growing number of countries are beginning to face varying levels of debt distress.
To know more: https://go.edc.ca/trade-insights_pod
Each year we publish our analysis of the top risks facing Canadian exporters over the next 12-18 months. While protecting your business from all risk is neither possible nor even desirable, planning for the most plausible and impactful ones can help fine-tune your risk management systems and better position you for success.
To know more: https://go.edc.ca/trade-insights_pod
In our summer Global Economic Outlook, we expect a significant drag on some of the key drivers behind the consumer activity that’s been powering much of the momentum up to now.
https://go.edc.ca/trade-insights_pod
While Canadian exporters aren’t as downbeat as they were in the fall, it may not be time to break out the champagne just yet.
https://go.edc.ca/trade-insights_pod
With global growth this year forecast to hit just 2.4%, according to Export Development Canada’s latest Global Economic Outlook, the air is coming out of the global economy.
https://go.edc.ca/trade-insights_pod
The global critical mineral supply chain is complex and fraught with risk, raising questions around how secure and stable critical mineral development will be over the long term.
To know more: https://go.edc.ca/trade-insights_pod
The challenges posed by increasing tightness in labour markets are great. But Canada isn’t alone in dealing with these labour deficiencies.
To know more: https://go.edc.ca/trade-insights_pod
Our modern economies have evolved to depend on one another, in which no one region or ideological camp can be fully self-sufficient. So, has globalization reached a critical turning point?
To know more: https://go.edc.ca/trade-insights_pod
The U.S. is racing to secure essential technologies and supplies in the name of economic prosperity and national security. Should Canada be worried about this doubling down on protectionist policies?
To know more: https://go.edc.ca/trade-insights_pod
Why is the global economy feeling like a ship sailing into still and stagnant waters, as developed and emerging economies alike struggle for momentum?
To know more: https://go.edc.ca/trade-insights_pod
While diversifying to new markets can be rewarding, it also comes with risk. The bold few, who are ready to brave the complicated current geopolitical backdrop, will find immeasurable opportunity. Those who are well-informed will be best-positioned for success.
To know more: https://go.edc.ca/trade-insights_pod
While it’s easy to be distracted by the day-to-day gyrations of the market, and the flurry of news around the global economy, we need to keep our eyes on the immutable structural trends that will shape the world that Canadian companies will be competing in over the long term.
To know more: https://go.edc.ca/trade-insights_pod
As we expect to see a gradual weakening of Canada’s domestic economy in 2023, international trade will be more important than ever. So, why has the share of Canadian gross domestic product (GDP) and jobs supported by exports fallen from 38% in 2001 to 30% in 2021?
To know more: https://go.edc.ca/trade-insights_pod
In 2023, will the gains that helped many African countries emerge as competitive markets be reversed or will this be another test of resilience for the continent?
To know more: https://go.edc.ca/trade-insights_pod
The global economy came careening into 2022 having navigated a series of peaks, valleys and blind curves. How will we navigate 2023?
To know more: https://www.edc.ca/en/weekly-commentary/global-economy-hard-road-ahead.html
Only two years ago the European Council announced enhanced greenhouse gas reduction goals, targeting a 55% cut in emissions by 2030. Can Europe’s immediate energy needs be reconciled against these ambitious climate change targets that require a phaseout of fossil fuels?
To know more: https://www.edc.ca/en/weekly-commentary/energy-crisis-threat-europe-climate-goals.html
As we close out 2022, EDC Economics looks back at some of the predominant themes of the past year, and what they mean for 2023.
To know more: https://www.edc.ca/en/weekly-commentary/2022-review-year-ahead.html
Twice a year, our Trade Confidence Index survey goes to field to gauge how global and domestic economic conditions are impacting Canadian exporters and export-ready businesses.
With Canadian exporters facing unprecedented levels of uncertainty, due to supply chain concerns, rising business costs, global economic conditions, staffing and cash flow challenges, it won’t be surprising that the overall TCI dropped for a third consecutive time, in stark contrast to the historic heights reached in 2021.
To know more: https://www.edc.ca/en/weekly-commentary/canadian-exporters-brace-for-chill.html
The current wave began in 2018 with the election of Mexican President Andrés Manuel López Obrador, through Argentina in 2019, Bolivia in 2020, Peru, Honduras, Chile in 2021 and the historic 2022 election of Gustavo Petro in Colombia. And, on Oct. 30, Brazil’s Lula defeated incumbent president, Jair Bolsonaro, returning the icon of the Latin American left to the presidency. Is Latin America witnessing a resurgence of the so-called pink tide? And, if so, what will it mean for the region’s policy outlook and its business environment?
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We came into 2022 with hopes of finally putting the COVID-19 volatility behind us, but the lingering fallout continues to cause global economic hardships. The more downbeat outlook for the global economy has caused country risks. However, this doesn’t mean that Canadian companies should sit on the sidelines.
To know more: https://www.edc.ca/en/weekly-commentary/edc-monitoring-country-risks.html
With the world’s central banks now focused on bringing inflation down from near 40-year highs, energy disruptions in Europe expected to intensify over the winter and the continuation of China’s zero-COVID-19 policies, global trade is expected to weaken heading into year-end.
To learn more: https://www.edc.ca/en/weekly-commentary/global-export-forecast-trade-slowdown.html
While the global cleantech market is projected to exceed US$2.5 trillion by 2022, Canada’s slice of that is about 2% of the total. Can Canada supercharge its cleantech exports? And what does the current global environment mean for our cleantech aspirations?
To learn more: https://www.edc.ca/en/weekly-commentary/canada-cleantech-potential.html
To say that 2022 hasn’t played out quite the way most have expected would be an understatement. Going forward, there are many interdependent risks with global implications.
Our fall 2022 Global Economic Outlook sees global growth falling to 2.2% this year, and 2.6% in 2023. While we aren’t forecasting a global recession, a fragile global economy leaves little room for error.
To know more: https://www.edc.ca/en/weekly-commentary/fragile-global-economy.html
While the volatility of the day has made it more difficult to see beyond the current market turmoil, a look at structural trends helps restore focus on the world we’re moving towards. To help see through cyclical gyrations, and get a clear view of where we’re headed, we have updated our list of key long-term trends.
To know more: https://www.edc.ca/en/weekly-commentary/edc-trends-watch.html
If nothing else, talk of recession and depressed demand have brought temporary relief to out-of-control food prices. However, it may be premature to declare victory over the global food crisis. As pressures on these vital supplies persist, is there a role for Canada to play?
To know more: https://www.edc.ca/en/weekly-commentary/sectors-in-focus-commentary.html
As we struggle to exit the global pandemic, the path ahead is fraught with risk. Many of these risks are interrelated and interdependent, perhaps more-so than at any other time in recent history. Here’s hoping that a gentle unravelling of these risks is more than just a Summertime Dream.
To know more: https://www.edc.ca/en/weekly-commentary/edc-top-10-risks-commentary.html
The Russian invasion of Ukraine has threatened global fuel security and set in motion a series of events that raise questions around existing supply lines. Does Europe’s energy predicament offer an opportunity for Canadian oil and gas?
To know more: https://www.edc.ca/en/weekly-commentary/canada-europe-energy-supply-options.html
Perspective is everything, or so we’re told. So, what do past business cycles, a part of the normal fluctuations experienced by all economies over time, tell us about what’s in store for the global economy today? And what can exporters do about it?
To know more: https://www.edc.ca/en/weekly-commentary/economic-downturns-much-shorter.html
After two years defined by the spread of COVID-19, and associated public health restrictions, there was widespread belief that in 2022 we would race full-speed to the path we were on before the pandemic. Now, almost midway through the year, with growth likely to slow and more challenges in view, the global economy faces a bumpy road ahead.
To know more: https://www.edc.ca/en/weekly-commentary/weak-global-economic-growth.html
Our latest mid-year Trade Confidence Index (TCI) survey results, reflect the pervasive sense of confusion and turmoil being felt by Canadian businesses, exporter or not. The overall index dropped for a second consecutive time, down nearly eight points, to 69.1, a level well-below its historical average of 73.2.
To know more: https://www.edc.ca/en/weekly-commentary/exporter-trade-confidence-gloomy.html
The cultural sector contributed more than $57 billion to Canada’s gross domestic product (GDP) in 2019 and supported nearly 673,000 jobs across the country. However, there is still untapped potential. There are anywhere between 2,400 and 7,800 Canadian cultural goods and services producers who could sell abroad, but aren’t yet engaging in international export activity. Together, they could generate up to $6.4 billion in annual export revenues.
To know more: https://www.edc.ca/en/weekly-commentary/canada-cultural-sector-export-potential.html
Are the 2000s shaping up to be the millennium of tail risks? The 9/11 terrorist attacks, a near-collapse of the global financial system, a resurgence of populism in developed economies, a pandemic-induced shutdown of global industry, war in Europe. And we’re only getting started.
To know more: https://www.edc.ca/en/weekly-commentary/instability-triggers-in-plain-sight.html
2022 was supposed to be different, to be welcomed with cautious optimism. We envisioned a global economy firmly on its recovery trajectory, and risk stabilizing, albeit at a higher level. Instead, the first quarter of this year has been dominated by the conflict in Ukraine, with shockwaves felt far and wide.
To know more: https://www.edc.ca/en/weekly-commentary/ukraine-conflict-increases-country-risk.html
The war in Ukraine threatens energy supplies to Europe, has upended confidence and thrown into question the continent’s ability to restore growth and stability.
Across the pond, inflationary pressures far outweigh fears of a growth slowdown, for now at least, and questions abound about the U.S. Federal Reserve’s ability to orchestrate a soft landing. However, a large, admittedly less visible segment of the global economy, faces concerns of a more existential nature.
To know more: https://www.edc.ca/en/weekly-commentary/less-visible-victims-of-war.html
Since the onset of the pandemic, global supply chains have gained a newfound prominence in pop culture. Gone are the days when only a small group of professionals worried about supply chain logistics.
This week, we look beyond the current disruptions caused by the pandemic and the war in Ukraine and delve into the broader supply chain vulnerabilities facing Canadian companies, including the implications across key sectors.
To know more: https://www.edc.ca/en/weekly-commentary/supply-chain-vulnerabilities.html
Canada is often touted as being one of the best places to live, work and start a business—and in a lot of ways, it lives up to that image. A closer look at our business and economic competitiveness, however, reveals a slightly different reality. What do commercial competitiveness indicators tell us about Canada’s strengths and weaknesses, and possible strategies to help realize the full potential of this great country?
To know more: https://www.edc.ca/en/weekly-commentary/canada-competitive-business-environment.html
Tight employment conditions are forcing businesses to up the ante, in their efforts to attract the critical talent to meet growing customer demand, putting upward pressure on salaries, wages and benefits. Where have all the workers gone? And what does this apparent shortage tell us about future labour market dynamics?
To know more: https://www.edc.ca/en/weekly-commentary/tight-labour-conditions.html
Russian President Vladimir Putin’s large-scale invasion of Ukraine is inflicting widespread casualties that’s resulting in a humanitarian catastrophe. The economic fallout of this crisis is having reverberations around the world. EDC Economics continues to monitor developments—including the duration, intensity, and location of conflict, the terms of any negotiated settlement, as well as ongoing sanctions and trade restrictions taken by both Russia and the West—as we update our forecasts.
To know more: https://www.edc.ca/en/weekly-commentary/economic-fallout-ukraine.html