Economists at Bank of Nova Scotia have trimmed their forecast for Canadian real gross domestic product (GDP) growth this year and next, due to weakness in recent data.
In a new report, Scotia Economics lowered its forecasts by 0.1 percentage points, to 2.0% and 1.7%, respectively, citing “recent indicators pointing to a loss of momentum heading into 2013.”
“Consumer spending is reasonably buoyant, but housing activity has softened, fiscal restraint is ongoing, and weaker global growth and lower commodity prices have dampened exports and business outlays,” it says. Scotia’s growth outlook for 2014 is unchanged at 2.3%.
At the same time, Scotia has raised its 2012-2013 U.S. growth forecast slightly to 2.2% and 2.0%, respectively, following upward revisions to third quarter GDP. “Retail and housing activity are improving, but uncertainty over the year-end ‘fiscal cliff’ is weighing on business investment and hiring, and weak global growth is restraining exports,” it says. Its 2014 forecast for the US is also unchanged at 2.5%.
Overall global growth is expected to pick up gradually, with real GDP forecast to advance by an average 3.2% in 2013 and 3.8% in 2014, it says. And, it projects that oil prices will remain high in 2013, despite slow growthin world demand, “underpinned by geopolitical supply risks in the Middle East and regional supply shortages linked to temporary cutbacks in nuclear power.”