B.C. is projected to remain one of Canada's strongest economies in 2008, despite continued fallout from the U.S. sub-prime mortgage crisis that continues to ripple through the global economy.
Warren Jestin, Scotiabank's chief economist, said B.C.'s economic growth should remain at 3% in 2008 because of strong public and private construction activity, a vibrant mining sector, positive interprovincial migration and solid personal income growth of its citizens.
He added that B.C. will trail only Alberta, with a 3.4% growth projected, and Saskatchewan with its 3.1% growth fuelled by robust potash mining activity, and record wheat and canola prices.
Overall, Canada's economic growth is not expected to increased more than 2.2%. Jestin said Canada's performance will be a little above the average of G-7 countries because of significant government spending, stronger consumer fundamentals and a buoyant global commodity prices.
The economy, however, will continue to suffer the effects of reduced U.S. economic activity and a high Canadian dollar that will likely remain strong despite a likely 50-basis-point drop by the Bank of Canada in domestic interest rates this year.
He expects global growth in the U.S., Western Europe and Japan to stay under 2% in 2008, because of lingering credit tightening, reduced global trade momentum and more cautious household spending attitudes in those markets.
Brazil, Russia, India and China are expected to continue to have economies that outperform traditional developed countries.