Against a background of slowing global growth and lingering debt problems in Europe, Dr. Warren Jestin predicts financial markets will be volatile through 2012. Public sector retrenchment and private deleveraging have already pushed the euro zone into recession. U.S. growth will struggle to beat 2%, even with interest rates near historic lows, and Washington is once again postponing serious action to reduce its enormous fiscal deficit.
While emerging market powerhouses have also lost economic momentum, growth should exceed 8% in China, 7% in India, and be close to 4% in Brazil. Canada may lag the U.S. in growth during 2012 as job creation and household spending moderate. However, unlike the U.S. and Europe, Canada has fully regained the jobs lost during the financial crisis, our housing and commercial real estate markets remain buoyant, and our relatively better fiscal position provides a strategic advantage important for longer-term growth and prosperity.
Canada’s financial system, the strongest in the world, also supports national growth at a time when banking crises in many countries are impeding the revitalization of economic activity.
Dr. Warren Jestin is a Senior Vice-President and Chief Economist at Scotiabank Group. He has been with the Bank since 1979. He also has worked at the Bank of Canada and taught at several Canadian universities. Warren is on advisory boards for the College of Management and Economics at the University of Guelph and the Sobey School of Business at St. Mary’s University. He has served on the C.D. Howe Institute’s Monetary Policy Council and has been involved with policy committees of the Canadian and Ontario Chambers of Commerce and the Toronto Board of Trade. As Chair of Scotiabank’s Sponsorship and Donations Committee, Warren works closely with a wide variety of charitable institutions.
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