Canada's economic growth will slow in 2019, partly due to weakness in the energy sector, according to the latest RBC Economic Outlook Report released March 15.
RBC Economics downgraded its 2019 Canadian forecast to 1.5 per cent GDP growth from its previous forecast of 1.7 per cent.
In addition to energy sector woes, the report also anticipates softer consumer spending as households adjust to higher interest rates.
However, RBC Economics expects the severity of the energy-led downturn to be short-lived.
"The impact of the energy-sector weakness on the Canadian economy is more limited when compared to the previous oil downturn in 2015 and 2016," said Craig Wright, Senior-Vice President and Chief Economist, RBC. "Our forecast assumes that oil prices will hold around current levels throughout 2019 and grind higher in 2020."
The economy will also benefit from the strong labour market with the unemployment rate holding at more than a 40-year low. In addition, projected growth of 2.4 per cent in the U.S. should support Canadian exports, says the report.