Trepidation is often defined as a worry or fear of what is going to happen. This best describes the feeling many Canadian investors have regarding the economic outlook for 2016. It all started with the dramatic collapse of world oil prices in 2014, the continued decline through 2015 and then into January 2016. To get a better appreciation of why there is growing concern for 2016, let us review the basic developments of 2015 and how they may impact on developments in 2016.
Table 1 identifies some of the key economic developments of 2015 that are now weighing on our minds as we launch into 2016.
* Economic growth. The year 2015 started off badly as the economy contracted, and, by the summer GDP had fallen for two consecutive quarters, technically a recession. The Q4 will likely be slightly positive, but for the year as a whole, observers expect GDP will be near 1%. Not a good handoff to 2016.
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