I analysed 5 economic indicators (GDP, BOP, Inflation rate, Unemployment and Exchange rate) of Canada and compare them to those from Argentina. The presentation was Monday 20/12/2010 in Brussels (EPHEC)

1. m a te
C li
m ic
o n o
Ec

3. The 3 main recessions in Canada since 98
The dot-com bubble was a speculative bubble around
.com companies in the IT sector. Over 1999 and Early 2000
Federal Reserve increased interest rates six times it caused
Bubble the burst of the bubble and a recession wich was particularly
important in North America (USA/Canada)
2003 Increase of imports because of a strong Canadian dollar
and opening of the Chinese Market. Oil crisis in the
2004 Middle East the barrel price rose above 30$.
Rise in subprime mortgages deliquencies and
Subprimes foreclosure => Households couldn’t pay anymore their
mortgages. Prices of the houses went down => They couldn’t
Crisis refinance the first mortgage with a second one => default of
payment => Infinite loop

5. Canada’s GDP annual growth rate
GDP dropped from 6% (2000) to 0,8%(end 2001)
2000
2001 Demand => accelerator effect => interest rate (1%)
=> multiplier effect => production (5,2%)
2003 GDP dropped from 3,49%
2004 (begin 2003) to 1,5%(end 2003)
GDP growth rate has never
2008
been as low as in 2009 with
2010
-3,18%
OECD sait it expected its members, mostly advanced economies such as Canada, to post
Forecast for 2012
growth of 2,3% in 2011 and 3% in 2012

6. Argentina’s GDP annual growth rate

7. Canada’s Unemployment Rate
2000 GDP => unemployment rate but not in the same proportion. If the GDP dropped by
2001 5,2%, the unemployment rate increased by 1,3%
GDP => unemployment rate
2003 but not in the same proportion. If
2004 the GDP dropped by 2,03%, the
unemployment rate
increased by 0,5%
=> a GDP growth rate so low
2008 lead to an unemployment
2010 rate very very high : 8,7%
in 2009 => +1,8%
compared to 2008
Canada’s unemployment rate is expected to remain steady in 2011-2012, in the high range
Forecast for 2012
of 7%

8. Argentina’s Unemployment Rate

9. Canada’s Inflation Rate
2000 Increase from 2,1% to 4%
2001 demand => interest rate + government budget (1,5% of GDP) + subsides
2003 dropped from 4,4% to 2%
2004 increase of taxes - decrease of
the government budget by 0,1%
of the GDP
2008
deflation of 0,9%
2010
taxes => demand => GDP
=> unemployment rate
The Bank of Canada aims to keep inflation at the 2% target and if the forecat are right they
Forecast for 2012
will reach their monetary policy goal.

10. Argentina’s Inflation Rate

11. Canada’s Current Account
2000 increase from 1,5 billions to 11 billions ($CAN)
2001 expansion of exports (+ 5 billions $CAN) and imports (+3 billions $CAN)
dropped from 7,64 billions to
2003 0,7 billions ($CAN)
2004
decrease of imports (-3 billions)
and exports (-3 billions $CAN)
2008 deficit of 13,7 billions ($CAN)
2010
Big dependancy to the
United States

12. Argentina’s Current Account

13. Canada’s Exchange Rate
2000 CAN$ => exports and imports => exports > imports => surplus => interest rate + government
2001 budget => inflation
CAN$ => exports and imports 1,6
2003 => exports > imports => surplus
2004 => interest rate + government 1,2
budget => inflation
0,8
The Canadian dollar undergoes
2008 0,4
a depreciation of 0,08$CAN
2010
because of the deflation and
0
the decrease of the GDP. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
The Bank of Canada faces a double issue for 2011 and 2012, they are expecting to increase
Forecast for 2012
exports by keeping $CAN low/stable but if they do that the inflation rate will increase

14. Economic Climate
Conclusion
Upward market
Downard market All the economic
TRENDS indicators
=> are LINKED togeter
Since 2000 =>
BEAR Market