Canada and Australia have a lot in common. Both economies are commodity exporters. Both countries have experienced high rates of immigration. Both countries largely dodged the global recession that shocked the developed world. Both are said to have world-beating banking systems. Both nations have amongst the developed world’s most expensive housing, when measured and against incomes and rents. And both have highly indebted households.
With these factors in mind, it is interesting to read that Canada’s economy has slid into recession. From the BBC:
Gross domestic product (GDP) fell by an annualised rate of 0.5% between April and June.
That follows a contraction of 0.8% in the first quarter, meaning the economy has seen two consecutive quarters of negative growth, the usual definition of recession…
As an oil exporting country, Canada has been hit by a fall in the price of the commodity.
US crude oil prices are currently trading at about $47 a barrel, less than half last year’s level of $107 a barrel, pushed lower by a fall in global demand, particularly from China…
Substitute oil for iron ore, and fast forward a few quarters, and you could just as easily be reading a story about Australia, which has also pinned its future on the (now spluttering) Chinese economy, with little else to fall back on.
