Canada: Macroeconomics Presentation

MACROECONOMICS
PRESENTATION
Canada
Group 6
195_Dnyanesh
212_Nimish
215_Nishi
222_Rahul
230_Sayan
237_Simran
Introduction
❖ Capital - Ottawa
❖ Population - 38 million
❖ Currency - Canadian Dollar
❖ Language - English
❖ Area - 2nd Largest Country
Highlights of Economy
❖ A highly developed market economy
❖ Leading sectors include automotive and other
manufactures, forest products, minerals, and petroleum
❖ 10th-largest economy
❖ market-oriented economic system resembling with US
❖ Leading sectors include automotive and other
manufactures, forest products, minerals, and petroleum
Nominal GDP
❖ 1.7 T Dollar Economy
❖ 10th Rank Worldwide
❖ Key Industries: Real
Estate & Manufacturing

Real GDP
❖ 1.91 T Dollar (Sept.
2020)
❖ Total Value of goods and
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services adjusted for
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eiusmod tempor.
❖ 2-4 % Normal y to y
growth
GDP by PPP
❖ Gross domestic product
converted to
international dollars
❖ 1.9 T Dollars
❖ Ranked 16th (2019)
❖ An average annual rate
of 3.99%
Annual Growth Rate ❖ 1.7% in 2019
(compared with last
year)
❖ 8.9% record growth in
Q3 2020
❖ Continuous Positive
growth rate pre covid
Income per Capita ❖ Income per capita- 46272 $
(2019)
❖ Decreasing at the rate 1.34%
each year over last 8 years
❖ A measurement often used
to determine economic
growth and potential
increases in productivity
Human Development Index
❖ Index- 0.929
❖ Rank 16
❖ World Average 0.737
Composition of
National Output
❖ Agriculture : 2% approx
❖ Industry : 25% approx
❖ Services : 73% approx
Primary Sector
The primary sector includes all those activities the end purpose of which consists in
exploiting natural resources: agriculture, fishing, forestry, mining, deposits.
Agriculture Sector
Secondary Sector
The secondary sector covers all those activities consisting in varying
degrees of processing of raw materials (manufacturing, construction
industries)
Manufacturing Sector
Tertiary Sector
The tertiary sector covers a wide range of activities from commerce to administration,
transport, financial and real estate activities, business and personal services,
education, health and social work.
Services Sector
Inflation Rate ● After dipping below 0, the
annual inflation rate in
Canada was 0.7 in October
2020
● Canada Inflation Rate is at
0.66%, compared to 1.86%
last year. This is lower than
the long term average of
3.11%.
Unemployment Rate
Canada Unemployment Rate is

at 8.50% up from 5.90% last
year. This is higher than the
long term average of 8.19%.
Interest Rates
Now Previous Highest Lowest
Policy 0.25 0.25 16.00 0.25

Interest
Rate
Deposit 0.06 0.06 22.06 -0.10

Interest
Rate
Exchange Rate
❖ Importance of Canadian Dollar (CAD):
➢ CAD is the seventh-most traded currency on the Forex
market
➢ It is known as a commodity currency, due to the country's
substantial raw material exports. It is also called the
Loonie, buck, Huard, and Piastre
➢ It forms about 2% of global currency reserves which
makes it fifth most held reserve currency in the world after
the US Dollar, Euro, Yen and British Pound
Canadian Effective Exchange Rate (CEER)
❖ The CEER index is a weighted average of bilateral exchange rates for

the Canadian dollar against the currencies of Canada’s major trading
partners
❖ CEER includes 17 foreign currencies, all of which are from countries
that account for at least 0.5 per cent of:
➢ Canadian non-oil exports (for a total of more than 93 per cent of
those exports)
➢ Canadian non-oil imports (for a total of more than 91 per cent of
those imports)
❖ Example of how CEER affects different industries
Balance of Payments (BOP)
● The Balance of Payments (BOP) is a statement of all transactions made between
entities in one country and the rest of the world over a defined period of time.
● These transactions consist of imports and exports of goods, services, and capital, as
well as transfer payments, such as foreign aid and remittances.
Current Account Capital Account

The current account includes The capital account consists
a nation's net trade in goods of a nation's transactions in
and services, its net earnings financial instruments and
on cross-border investments, central bank reserves.
and its net transfer
payments.
BOP vs BOT
● Balance of Trade is a statement that captures the country's export and import of goods
with the remaining world.
● Balance of Payment is a statement that keeps track of all economic transactions done
by the country with the remaining world.
➢ Some more information about Balance of Payments

➢ The current account may be positive (a surplus) or negative (a deficit); positive means the
country is a net exporter and negative means it is a net importer of goods and services.
➢ A positive current account balance indicates that the nation is a net lender to the rest of the
world. The country exports more than it imports.
➢ a negative current account balance indicates that it is a net borrower. The country imports
more goods and services & capital than it exports.
Canada’s Current Account
● Canada's current account deficit
narrowed by $4.6 billion in the second
quarter to $8.6 billion.
● Goods exports decreased by an
unprecedented $33.2. Goods imports
were down by a record $34.2.
● The trade in services balance recorded a
$0.2 billion deficit, down from $4.5 billion.
● The balance in commercial services went
from a $0.7 billion surplus in the first
quarter to a $0.5 billion deficit in the
second quarter.
Foreign Direct Investment
● Direct investment abroad increased to
$14.8 billion in the second quarter, from
$7.6 billion in the first quarter.
● Direct investment in Canada totalled $11.8

billion in the second quarter, up slightly
from the first quarter.
● Profits earned by Canadian investors on

their direct investment abroad fell $4.7
billion, while, profits earned by foreign
investors on their direct investment in
Canada were down $3.1 billion.
Policy Initiatives by Government in Canada
❖ GDP by up to $318 billion - 15% increase 2018
❖ increase the median Canadian per capita income by $13,000.
❖ net international investment position turned positive in 2019
❖ Canadian dollar increased the net position by 20 % points of
GDP
❖ unemployment rate has fallen to 11%, low historically
❖ overall investment framework is efficient and transparent.
❖ financial sector provides a full range of competitive services.
❖ federal government could permanently increase spending or
reduce taxes by 1.4% of GDP
❖ no double taxation at the corporate or individual level.
❖ short-term interest rates to achieve a rate of monetary
expansion consistent with the inflation- control target range.
References
❖ https://knoema.com/atlas/Canada
❖ https://databank.worldbank.org/source/world-development-indicators
❖ https://ycharts.com/indicators/canada
❖ ttps://www.bankofcanada.ca/rates/exchange/canadian-effective-exchange-rates/#Weights
❖ https://www.xe.com/currencycharts/?from=CAD&to=INR&view=10Y
❖ https://www.ibisworld.com/ca/bed/canadian-effective-exchange-rate-index/22/#:~:text=The%2
0Canadian%20effective%20exchange%20rate%20index%20measures%20the%20strength%
20of,more%20attractive%20for%20domestic%20buyers
❖ https://www150.statcan.gc.ca/n1/daily-quotidien/201118/dq201118a-eng.htm
❖ https://www150.statcan.gc.ca/n1/daily-quotidien/200827/dq200827b-eng.htm
❖ https://tradingeconomics.com/canada/current-account
Thank You

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What are the leading sectors of Canada's economy?

What is Canada's nominal GDP and world ranking?

MACROECONOMICS

❖ 10th Rank Worldwide

❖ Key Industries: Real

Estate & Manufacturing

Canada Unemployment Rate is

Policy 0.25 0.25 16.00 0.25

Deposit 0.06 0.06 22.06 -0.10

❖ The CEER index is a weighted average of bilateral exchange rates for

Current Account Capital Account

➢ Some more information about Balance of Payments

● Direct investment in Canada totalled $11.8

● Profits earned by Canadian investors on

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