Looking back at 2015, the first half of the year saw negative growth but looking at the big picture reveals a registered economic growth of 1.2%. Multiple factors attributing to the slow economic growth in 2015 has trickled into 2016 as well such as the low oil prices and the related adverse effects on income and job growth. With the newly elected federal government in place, there is an effort to utilizing old-fashioned fiscal policy in order to boost economic growth.
The range for the estimate of the fiscal multiplier for Canada ranges from 0.5 to 1.5. The fiscal multiplier is a ratio that shows the effect of government spending on economic activity. However, the level of impact of fiscal policy is highly interdependent on the state of the economy. BCREA's current forecast for the Canadian economy is for economic growth of 1.6% in 2016 and 2.5% in the following year, taking into account the impact of expansionary fiscal policy.
Source: British Columbia Real Estate Association
Stay tuned for the last part of the blog series where we'll dive into the Interest Rate Outlook. For all your real estate needs, contact Amalia Liapis at firstname.lastname@example.org or alternatively, at 604-618-7000.