Scotia Economics has nudged its U.S. economic forecast higher, but doesn’t expect the outlook to change for Canada, where renewed government austerity is expected to remain a drag on growth.

In a new report, Scotia is revising its U.S. GDP growth forecasts for both 2012 and 2013 slightly to the upside, boosting its 2012 call to 2.3% from 2.1%, and the 2013 forecast to 2.4% from 2.2%.

“Stronger hiring activity and improved domestic prospects continue to boost confidence,” it notes. However, Scotia also says that “a lack of fiscal clarity poses a downside risk.”

For Canada, its forecast for growth in 2012-13 is largely unchanged, with the economy expected to advance around 2.0% this year and 2.2% next year.

“Improving U.S. activity is supporting a pickup in industrial production and exports, while high commodity prices are buoying resource activity and investment,” it says. However, it notes that, at the same time, “slowing job growth, high consumer debt levels and public sector restraint are expected to keep housing and consumer spending on a more moderate trajectory.”

This spending restraint in recent government budgets, along with the ongoing drag on the export earnings, is expected to leave Canada’s economy as a slight underperformer relative to the U.S. this year and next, Scotia says.

Elsewhere in the report, Scotia observes that global inflation risks are moving to the upside, particularly with commodity prices, such as crude oil, edging higher. As a result, it expects the 10-year U.S. Treasury bond yield to trend higher, ending 2012 at 2.6% and finishing 2013 at 3.75%.

“Canadian longer-term bond yields will continue to trade below U.S. rates, a reflection of this country’s more favourable fiscal position and a currency expected to remain at parity with the greenback,” it says.

And, it concludes, “… the myriad of structural and growth-restraining economic and financial issues confronting the global economy — the ongoing deleveraging in both the private and public sectors, in addition to the increasing capital regulations affecting financial institutions — suggest that the global economy is unlikely to break free anytime soon from its moderate growth trajectory.”