Canada’S Political And Economic Qualification

Canada’s political and economic qualification

Introduction

The qualifications thrown to Canada reflect a growing per capita income after the decrease that it had for the impact of the COVID-19. In addition, it will present a great dependence on oil, metals and meat exports to its main buyers such as the United States, Mexico and China respectively, as well as a slight vulnerability to external shocks, since the current account balance will present more negative values After 2020, so Canada will seek federal financing, therefore the external debt will increase for the current year and the following two periods, reducing by 2023, however, this will be reduced over time.

Developing

Currently, the head of government of this country is Justin Trudeau, who is characterized by his liberal ideology and its effective reforms, such as the opening of the market, regulatory efficacy, government size and property rights that have contributed to well -being as a whole as a whole. Canada presents the Canadian dollar as a legal currency, has maintained stability as currency, since it has not presented fluctuations so pronounced over the years. The real effective exchange rate depreciated approximately 5% in 2018 and 1% for 2019, as Canada presents a flexible monetary policy, this last value is expected to be maintained for the next three periods.

The Canadian economy presented a GDP growth of only 1.6% in 2019 and this value is expected to be drastically reduced to 5.

3%. The crisis caused by the worldwide pandemic of Coronavirus has destabilized the economy a bit. This economy is expected to recover the following year, that is, from 2021 and improving until 2023, since it is a developed country, with its own currency, efficient mining and with great exports there are positive expectations for this country. The fall in the price of oil presented at the beginning of 2019 and the world pandemic that affected the Canadian economy in different ways.

This points to a decrease in economic, fiscal, external and monetary indicators. It is estimated that the per capita growth trajectory of Canada is in the average compared to its peers with a similar level of GDP per capita. However, free trade agreements between North American countries could encourage the increase in Canada’s exports, as well as foreign investment for Mexican lands such as the construction of a vehicle production plant that will allow you to increase employment levels For this country. Canada’s fiscal policy is mainly based on corporate taxes, rent, sales and social security.

Income Tax is the type of tax that most collects, in addition to these taxes, social spending, which is basically composed of subsidies, contributions and other payments to improve social welfare, as well as public investment; This has generated that this country has an aggressive fiscal policy among the 2014 to 2019 periods. However, due to the pandemic and the consequences it caused as the fall in the oil price will lead to Canada looking for other forms of income. It is expected that by the end of 2020 this country will have a fiscal deficit of 7% of GDP. However, with fiscal adjustments, the government debt is expected to generally increase in a 2.9% of GDP.

On average during periods 2021 to 2023, in this way the fiscal deficits that will be presented in the aforementioned years are reflected. It is forecast that the net debt of the general government by the end of 2020 is 45% of GDP. Given to the advantages that this country has to finance internally for having a local model and therefore support of the federal institution, it is expected that financing will come from intrinsic sources. The arrival of Coronavirus to the North American country paralyzed the international economy of this, causing oil prices to decay, as well as the paralysis of exports, all this has weakened the external indicators of this country.

Therefore, it is expected that, by the end of 2020, the balance of the current account is -2.2% and that this continues to deteriorate an average of 3.17% for the next three periods. It is forecast that, for the next three periods, external indicators will improve, sustained by the increase in the price of crude oil, some profits from metal exports and agreements with US countries. It is estimated that Canada’s external debt by the end of 2020 is 134.5% of the current account income (CARS) and which remains on average at 132%, on the other hand, gross financing needs will average 168.5% of the cars.

Taking into consideration the usable reserves during 2021 to 2023. Canada is a country that provides a high standard of living to its inhabitants with an important emphasis on basic education and public health, considered as a stable economy and with low growth in its prices, so it enters the group of seven. This country, thanks to its geographical conditions, has a wide variety of natural resources that allow producing and exporting various products to other economies of similar economic magnitude. Because the government of Justin Trudeau ratified the acceptance of citizens in the 2019 elections, there is expected that there are no sudden changes in governance.

conclusion

It is expected that there are also no changes in economic policies and that the Canadian dollar also remains its legal currency. Regarding the course of the economy product of COVID-19, an increase in sovereign debt is estimated but also the maintenance of inflation at its objective level. Economic reactivation must be the end of government programs to counteract the negative effect of pandemic in the unemployment rate. It has a wide variety of natural resources that allows to produce and export various products to other economies of similar economic magnitude. Because Justin Trudeau’s government ratified the acceptance of citizens in the 2019 elections.