National Bank of Canada Eco. & Strat. Team
National Bank of Canada
Highlights
A disappointing first half of 2014 for the global economy is set to be followed by a better second half. Despite the continued stagnation of the eurozone, advanced economies as a group should do better thanks to the U.S. regaining its vigour and Japan recovering from a sales tax-related GDP slump. The related improvement in OECD demand should give a boost to emerging economies’ exports. We are keeping unchanged our forecast of 3.3% for global growth this year.
Upward revisions by the BEA, coupled with a strong second quarter, prompted a two-tick upward revision to our 2014 U.S. GDP growth forecast to 2%. That assumes growth averaging 3% in the second half of the year, a conservative estimate considering the potential for consumption and investment spending to accelerate. We have trimmed our inflation forecasts marginally to reflect softer energy prices.
Like the U.S., Canada accelerated in the second quarter. It’s unclear if domestic demand can maintain the momentum over the rest of the year as housing softens and as debt-burdened households cap consumption spending. Still, we remain comfortable with our 2014 growth forecast of 2.3%, expecting healthy contributions from investment spending and trade in the second half of the year. The decline in energy prices prompted us to lower our CPI forecasts slightly.
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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