Canada is on track to be the G7's growth leader in 2017, according to the latest RBC Economic Outlook released Dec. 12. RBC Economics expects real GDP to grow 2.9 per cent in 2017.
The RBC forecast calls for slower but above-potential growth of 1.9 per cent in 2018, with growth moderating to 1.6 per cent in 2019.
Heightened political uncertainty
"This was a highly unusual year for the global economy with heightened political uncertainty accompanied by strong financial market performance and accelerating economic growth," said Craig Wright, Senior Vice-President and Chief Economist at RBC. "Canada's robust growth in 2017 is likely to moderate somewhat in 2018 as key economic drivers shift, but we still anticipate the economy will continue to outperform its potential."
Active housing market
Canadian consumer and an active housing market drove growth in 2017, however the dominant forces driving the economy are likely to change in 2018, says the Outlook. “Government spending on infrastructure and a moderate increase in business investment, which began to recover in 2017, are forecast to support economic growth next year. Canadian exports are expected to strengthen mildly in 2018, although the outcome of the NAFTA negotiations has the potential to stymie both exports and investment next year,” says RBC.