Scotiabank cuts outlook for Canadian GDP growth

first_img OECD raises outlook for Canadian economic growth this year Canada’s economy has lost considerable momentum in response to the persistent weakness in exports and business investment The Canadian economy has “lost considerable momentum” due to persistent weakness in exports and business investment, according to the latest update to Scotia’s global forecast report. Related news James Langton Stagflation is U.S. economists’ biggest fear, SIFMA says “The fallout from the energy sector, aggravated by the renewed slump in crude oil prices, is still taking a toll on the producing provinces — primarily Alberta, Saskatchewan, and Newfoundland & Labrador — though most regions are being affected by the weakness in energy-related demand for manufactured goods and business services,” the Scotia report says. Although these factors are expected to continue to weigh on economic performance in 2015, this current weakness is expected to eventually be followed by a “gradual rebound, with non-energy exports piggybacking upon the improving conditions south of the border,” says the Scotia report, adding that weakness in the loonie should also give exports a boost. “Looking ahead, we continue to expect improving U.S. demand combined with a lower-valued Canadian dollar will support stronger exports and industrial activity, lifting output growth next year to 2.0%,” the Scotia report says. Scotia’s forecast for U.S. GDP growth is unchanged at 2.3% in 2015, and 2.8% in 2016. “The U.S. economy is showing signs of improving momentum after a weak start to the year, led by consumer and housing activity,” the Scotia report says. “Solid job growth, rising income gains, low gas prices and pent-up demand should sustain the pick-up in household demand into next year, while stronger sales are expected to give a lift to business investment.” However, for Canada, the effects of soft commodity prices and weaker output growth “are expected to increase the challenge of retaining federal surpluses in fiscal 2015-2016 and 2016-2017,” the Scotia report concludes.center_img Economy lost 68,000 jobs in May Share this article and your comments with peers on social media Keywords Economic forecasts Facebook LinkedIn Twitterlast_img read more