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Posted: November 19th, 2022
Macroeconomics: Canada in the Global Environment
BBUS 1007 Winter 2017
Group Assignment
Introduction
The economies of Sweden and Canada possess various similarities and differences based on different measures of their macro economies. By performing an in-depth macroeconomic analysis, we observe the trends and patterns in the two countries that have motivated the economies to their current state and the future performance predictions based on the collected data. Measures such as GDP, inflation, recessions and expansions that have occurred over time, employment and income distributions, monetary and fiscal policies are among the metrics used to analyse the economic state of the two nations.
Discussion
As of March 2017, CPI inflation which is quantified as the annual change in the consumer price index stood at 1.8% in Sweden. The target value of the Riksbank (Sweden’s central bank) is 2%. This is motivated by the Country’s excellent income distribution methods that has made the Swedish have among the highest standards of living in the world. Canada’s annual inflation rate stands at about 1.7% from the country’s central bank data. The CPI target set by the bank stands at 2.0%. Based on the measures set by the central bank. The inflation rate has been adversely affected by worldwide oil prices since petroleum is among the country’s major exports. (Hasselbach, 2017)
Canada’s economic growth is projected to hit 2.3% in 2018. The country’s economic competitiveness has been upheld by solid institutional foundations of an open-market system. Management of public finance has generally been prudent with the government’s economic policies tilting towards income redistribution. Sweden on the other hand has seen a faster economic growth at 4.1% based on an increase in their GDP among other factors. Sweden’s economy is a well-developed and export oriented economy that employs a Nordic model for income distribution. (Spencer, 2013)
Canada’s job growth has been on a steady growth despite economic analysts’ predictions. Average hourly wages have also been on the rise with a lot of the jobs coming from full time employment and others from part-time employment. There were significant job losses in 2015 as the oil prices begun to decline but increased employment in manufacturing and construction has offset this. Swedish jobless rate fell to 7.4% in 2017 from 7.6% in the same period in 2016. About 30% of the Swedish workforce are civil servants. Both countries enjoy relatively low unemployment rates with majority of the working class being between the ages of 25-50.
Household prices in Sweden have been on an increase forcing many households to take hefty mortgages to finance purchasing of apartment buildings and residential houses. There has been a high growth of private investment in housing construction. Although the rate of housing increase has slacked recently, the prices of houses in major cities have risen to high levels. Stockholm is ranked 3rd as the most expensive city. Canada’s urban populations are set to steadily continue broth as their needs evolve. Housing affordability has become a concern in Canada. Vancouver has been ranked the most expensive city to live in in the world. This is due to a high demand from the population but low supply of housing that has seen the prices more than double over the past few years. In both countries, affordability of housing has become a key issue. There have been concerns about excessive borrowing to finance the mortgages.
Both Canada and Sweden have seen incredible economic growth that has set the two countries to be among the most influential economies of the world. Canada for example is among the world’s wealthiest nations and Sweden has among the highest standards of living. Canada’s economic performance suffered a weak year in 2015 due to the falling oil prices but has since rebounded. Sweden’s competitive mixed economy will see the country enjoy sustainable economic growth for the next couple of years.
Works Cited
Hasselbach, D. (2017). Inflation in Canada. Retrieved from Reuters: business.financialpost.com
Spencer, D. (2013). Comparative Macroeconomic Analysis of Canada and Mexico.
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