RBC Financial Performance Update
-2
Economy's recovery set to strengthen as containment measures ease
■ The Canadian economy continued to grow in Q1. GDP rose in January despite re-imposed containment measures weighing heavily
on activity in the travel and hospitality sectors. And an easing in restrictions during the lull in virus spread between the second and third
waves of COVID-19 led to further growth over February and March. Another round of containment measures implemented in the third
wave will slow the pace of growth in Q2. However, government supports for households and businesses have been extended and
vaccine distribution continues to ramp up. We continue to expect GDP growth will re-accelerate over the second half of 2021 as
vaccine distribution reduces virus threat and allows for more easing in containment measures.
Unemployment remains very elevated, but government support programs continue to provide larger than normal income replacements
for those losing work.
■ CPI inflation is expected to spike higher in the near-term because of very low year-ago prices, particularly for gasoline. Excluding
energy prices, inflation pressures are expected to build through the year as higher raw-material prices filter through to end-product
consumer prices and consumer demand recovers over the second half of the year.
■ The recovery in the U.S. economy is expected to be boosted by rising vaccination rates and large amounts of fiscal stimulus. U.S.
GDP is expected to increase 6.2% in 2021 following a 3.5% drop in 2020.
Canadian Inflation (YoY) (1)
Canadian Inflation (YoY) (¹)
13
5
4
3
2
1
0
-1
May
спожи
12
11
10
6
8 7 6 5
2000
2001
2002
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2013
2014
2015
2016
Headline
BoC Target
2017
2018
2019
2020
(1) Statistics Canada, RBC Economics Research. (2) Statistics Canada, Bureau of Labor Statistics, RBC Economics Research.
42 ECONOMIC BACKDROP
Canadian Labour Markets (YoY) (2)
1991
1992
1993
1994
1996
1997
Canadian Labour Markets (YoY) (2)
2002
2003
2004
2006
Employment growth (YOY% - RHS)
2007
LUUK
SUUL
2008
3000
2009
2011
2011
2012
2012
2013
2021
-Unemployment rate (% - LHS)
RBC
3 21072 3
-1
5
4View entire presentation