National Bank of Canada Eco. & Strat. Team
National Bank of Canada
Highlights
An awful start to the year, largely due to the surprising slump in the U.S., prompted us to cut our 2014 global growth forecast to just 3.3%. That, however, still represents an acceleration from last year’s pace. We continue to call for 3.8% growth next year, one tick lower than the IMF’s estimate, although that forecast too may be vulnerable if the recent upswing in oil prices is sustained.
Like the IMF, the Fed and others, we are cutting our 2014 growth forecasts for the U.S. to account for the steeper-than-expected slump at the start of the year. That said, considering the temporary factors at play in Q1 (bad weather and destocking), there is reason to be optimistic for the rest of the year. The private sector already seems to be bouncing back, buoyed by the end of household deleveraging and better investment spending made possible by the return of confidence and strong corporate profits.
Like its southern neighbour, Canada is set for a quick rebound after a rough start to the year. U.S. releveraging bodes well for exports. Domestic demand will remain under pressure as debt-laden households cap consumption growth, housing softens, and government outlays are limited by tight fiscal policy. But thanks to rising corporate profits, business investment has potential to bounce back and provide an offset. We expect Canadian GDP growth to accelerate to 2.3% this year.
This presentation may contain certain forward-looking statements about the 2009 Economic and Financial Outlook. Such statements are subject to risk and uncertainties. Actual results may differ materially due to a variety of factors, including legislative or regulatory developments, competition, technological change and economic conditions in Canada, North America or internationally. These and other factors should be considered carefully and readers should not rely unduly on National Bank of Canada’s forward-looking statements. This presentation may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be referred to without in each case the prior express consent of National Bank.
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