National Bank of Canada Eco. & Strat. Team
National Bank of Canada
Highlights
The global economy remains on track to grow at roughly the same pace as last year despite the moderation in China. Other emerging economies (outside of OPEC) will pick up the slack, helped by cheap oil and more competitive currencies versus the USD. Advanced economies should also do better than last year, driven by the US, the Eurozone and Japan. All of that, however, assumes governments manage to stave off major risks, including a Greek debt default, which threaten to derail global growth.
After a difficult start to the year, the US economy is set for a quick rebound. While trade will remain under pressure from the strong dollar, domestic demand should strengthen further on the back of solid fundamentals particularly for the consumer. Record corporate profits and an improved economic outlook also bode well for business investment. Moreover, the housing market has potential to improve thanks to the reported easing in lending conditions. We continue to expect the world’s largest economy to register close to 3% growth this year.
Canada’s disappointing first quarter is partly due to temporary factors that will dissipate in Q2. If the oil collapse of 2008 is any guide, one can expect the impact on investment to be somewhat delayed rather than front-loaded as the Bank of Canada seems to believe. So, there may be some downside risks to the central bank’s call for above-potential growth of 2.7% on average in the second half of the 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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