The Covid-19 delta variant and lagging vaccinations globally have driven continued rounds of port closures, factory shutdowns, production halts, and labor shortages. Interdependent global supply chains mean that Canadians and Canadian firms are facing supply shortages and higher prices across the board.
On the consumer end, the annual inflation rate hit 4.4% in Canada, its highest level in 18 years, as the cost of transport, housing, and food has jumped significantly.
On the business end, supply chain bottlenecks have constrained Canadian manufacturing and exports. As such, consumption, business investment, and government spending have been keeping Canada’s economic recovery afloat.
However, the property sector crisis in China and the debt ceiling showdown in the US, in addition to the supply chain crisis, are providing significant headwinds to Canadian and global growth. Economists polled by Bloomberg have slashed their forecast for Canada’s Q3 2021 growth from 9% to 4.5%.
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