(January 27 – 10:40 ET) – KPMG’s 19th annual Canadian Survey of Economic Expectations is predicting strong growth – 3.5% over the next 12 months, according to 47 economists and investment portfolio managers.
The survey’s respondents expect continued low unemployment, a 12% increase in corporate profits, moderate inflation of 2.3% and wage gains of 2.5%. The loonie is expected to climb back above 70¢US too.
Respondents are also anticipating short-term rate hikes to push 91-day T-Bill yields to 5.2%, with long-term rates settling at about 6.3%. Canadian stocks, both large and small caps, are expected to return 10%. For U.S. equities the prediction is 7%; it’s 12% for international equities.
“It would appear that our survey participants attribute their positive expectations to signs of recovery in Europe and Asia, and a continuing strong economy in the U.S.,” says Mike Ross, vice president in KPMG’s Policy, Economic and Financial Analysis practice. “As well, a strong Canadian economy, an expected $8 billion federal surplus and rising short-term interest rates are part of the consensus forecast.”
-IE Staff