FCC Senior Economist J.P. Gervais takes a look at current global economic trends and how they impact Canadian agriculture.
Gross domestic product (GDP) measures the value of goods and services produced in the economy. A country’s increase in GDP generally implies an increase in income – one of the major drivers of food demand in developing countries.
Low GDP growth in the western world is contrasted by higher rates in the BRIC countries (Brazil, Russia, India and China). An increase in GDP in emerging markets leads to increased income and demand for agri-food products.
Inflationary pressures are expected to remain low for the coming year because of the slowdown in Europe.
Interest rates will remain low all year.
Long-term, we can expect a relatively strong Canadian dollar.
A major recession in Europe would slow growth in China, putting downward pressure on commodity prices.