May 1, 2004 by Canadian Underwriter
While the so-called stock market rebound this year has “totally lacked conviction”, investors should still look forward to a rosier 2004, economist Dr. Lloyd Atkinson told a recent meeting of the Canadian Insurance Accountants Association (CIAA). Atkinson says that, despite a jobless, or in his words “job-loss” recovery in the U.S., that country’s economy is expected to grow by 4%-5% over 2004 – assuming the absence of a major terrorist attack. He also expects the stock market will grow by 20% over the course of the year.
Furthermore, with corporate profits as a percentage of gross domestic product (GDP) presently at their highest level since World War II, Atkinson expects a surge in productivity and job creation by the year’s end. He also sees short-term interest rates rising by between 1%-4% over the span of 12 months. While the Canadian economy will grow at a slower pace, Atkinson believes the dollar will settle at around US$0.73 when the dust settles – with foreign accumulations of U.S. dollars providing equilibration.