Source: www.theglobeandmail.com
Economy perks up
Canada’s economy is suddenly looking brighter on several fronts, but analysts aren’t optimistic that it’s going to last.
Economists are marking up their forecasts for economic growth, and they expect the Bank of Canada to do the same when it releases its monetary policy report this week.
Bank of America Merrill Lynch, for example, believes Canada’s economy expanded at an annual pace of 3.5 per cent in the forecast, and that growth for this year will come in at 1.8 per cent.
“Canada is benefiting from a number of small positives, including the boost from low rates, a weak currency and federal fiscal stimulus,” said the bank’s North America economist, Emanuella Enenajor.
“In contrast, the U.S. economy is still dealing with the lagged effects of dollar appreciation,” she added.
“For now, markets are still pricing in slight odds of an ease from the Bank of Canada this year and next. In contrast, we don’t think the BoC will ease: The economy looks to be on a stronger foot and is even rivalling growth in its neighbour to the south.”