(October 18 – 11:00 ET) –
Royal Bank of Canada
economists are predicting 75 basis
points worth of interest rate hikes
from the Bank of Canada over the
next few quarters.
While it is expecting the rate
hikes to dull the economy a bit,
Royal maintains a rather rosy view
on the fundamental state of the
Canadian economy. The past decade’s
restructuring has positioned the
economy to survive short-term
weakness and left it poised to
pounce on any juicy opportunities.
The economists forecast real
GDP growth of 3.6% this year,
slipping to 3% in 2000 as domestic
demand takes up the slack of an
expected U.S. slowdown.
Royal sees a slowing in the
U.S., but notes there appears to
be very little chance of recession
since there has been no tell-tale
inflation spike.
The bank sees strong growth in
Europe. Meanwhile, emerging
economies are seen ticking up
too in 2000, to average 2% to 3%
growth this year and next, up from
1.5% in 1998. Royal is a little
more skeptical on Japan, noting
that the government’s stimulus
initiatives may turn into
stumbling blocks if it is not
careful.
-IE Staff
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