Economic Outlook | March 2022
Economic rebound shaken by crisis in Ukraine
As Canadians look forward to putting the pandemic behind us with the reopening of the nation, a new crisis has emerged with Russia’s invasion of Ukraine. Initially the reopening of the country brought with it projections of rapid economic growth. However, these projections are now mediated by the newest global crisis in Ukraine.
This quarter’s outlook is shaped by the impact of the war in Ukraine and the continuation of supply chain issues across all industries. Deriving from both post pandemic concerns and, at present, the Russian sanctions. Consumer spending projections are expected to grow, driven by the change in messaging from public health, the reopening of establishments at full capacity, and consumers benefiting from a hot job market. Meanwhile, businesses have regained their confidence and are ramping back up on their investments that were on hold since the start of the pandemic. This includes the increase of energy investments as they are being supported by many ongoing major projects.
While Canada faces uncertainty as we emerge from the worst recession on record, that lack of clarity could also mean that projections lean conservatively. As things improve dramatically and we see advancements in our economic standing, we will need to remember that maintaining inflation and keeping expectations in check is a delicate balancing act that we will have to monitor closely.
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National Economic Advisory Leader
Dr. Trevin Stratton is Economic Advisory Leader and Partner at Deloitte Canada, where he applies economic thinking to identify the trends that are reshaping industry and to help private and public sector leaders tackle some of today’s most complex and challenging policy and business issues. Prior to joining Deloitte, he was the Chief Economist and Senior Vice President of Policy at the Canadian Chamber of Commerce, the largest and most influential business association in Canada representing a network of over 200,000 companies.