Canada has G7’s 2nd highest projected real GDP growth in 2023 and 2024
According to the International Monetary Fund (IMF), Canada trails only the United States (in 2023) and Spain (in 2024) with respect to projected Real GDP (Gross Domestic Product) growth over the next two years.
Real GDP is a commonly used indicator of a country’s overall economic health.
In 2023, the U.S. is projected to see its real GDP grow by 1.6%, with Canada’s growth anticipated at 1.5%.
Meanwhile, the IMF projects Spain’s real GDP to rise by 2.0% in 2024 while Canada’s figure is expected to grow by 1.5% again.
What does this mean?
Real GDP growth, as outlined by the IMF, “is often used as an indicator of the general health of [an] economy.” Positive movement in this value typically means that an economy is doing well.
According to the IMF, Real GDP growth is “likely” to coincide with increased employment and general economic prosperity because companies tend to need more factory employment to produce goods. Subsequently, due to the economic cycle created by the increased production of goods/delivery of services, periods marked by significant growth in real GDP often mean that people will also “have more money in their pockets.”
For Canada’s newest immigrants, this means that the availability of employment opportunities may rise across the country, increasing the potential of finding a job that leads to economic comfort as a new permanent resident (PR).
Additionally, having more spending money is beneficial for all Canadians but especially those who are just beginning their lives in this country. As the prices of things from groceries to home utilities and transportation fluctuate, additional disposable income is especially key for newcomers looking to establish a level of stability in their new homes.
What role does immigration play in real GDP growth?
By expanding the Canadian workforce, and consequently increasing the number of individuals capable of producing goods and services, immigrants to Canada play a significant role in boosting the nation’s real GDP growth.
Over the next three years, Canada’s Immigration Levels Plan for 2023-2025 outlines the government’s intent to welcome as many as 500,000 immigrants per year in 2025.
Note: Canada’s Immigration Levels Plan indicates that Canada seeks to welcome 465,000 new immigrants by the end of 2023, an additional 485,000 newcomers in 2024 and 500,000 new PRs in 2025.
This means that the impact of immigration on real GDP growth in this country will increase accordingly. With more working-age PRs being added to the national workforce, Canada can expect to see a more productive and prosperous economy in the near future.