As the nation's decade-long oil boom comes to an end, money has started to flood out of Canada at the fastest pace among developed countries. With little else looking ready to take the place of the country's primary economic driver, Canada's economy seems to be entering dire straits, according to Bloomberg Business.
During the last 12 months since June, Canada's basic balance has swung from a surplus of 4.2 percent of gross domestic product to a deficit of 7.9 percent. Kamal Sharma, a foreign-exchange strategist at Bank of America Merrill Lynch, states that Canada's figures show the fastest market deterioration among ten developed countries.
The deterioration of the market is also evident in Canada's currency, which is already down 11 percent against the U.S. dollar in September, evidencing an 11-year low for the currency. It has also slipped against most major currencies in early European deals on Monday, reports RTT News.
Alvise Marino, a foreign-exchange strategist at Credit Suisse Group AG in New York, believes that the drop in Canada's market is mainly due to the shift in energy investments. "This is Canadian investors that are pushing money abroad. The policy in Canada the last 10 years has greatly favored investments in energy. Now, the drop in oil prices made all that investment unprofitable," he said.
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