The Canadian economy is expected to grow by just 1.4 per cent in 2019 and the Federal Budget, released last week, is unlikely to affect this outlook, says The Conference Board of Canada's National Economics Team.
"The weak growth that was evident at the end of 2018 is expected to persist into the first half of 2019. Despite this weak growth, there are reasons to be cautiously optimistic," said Matthew Stewart, Director of Economics. "Job gains and wage growth were strong at the beginning of the year. In addition, the anticipated impact on investment from the measures contained in the federal government's fall economic statement have yet to materialize."
Canada’s GDP growth will be supported by the trade sector this year, the report says. “Despite a pullback in energy exports, total exports are expected to gain 2.0 per cent this year. With imports remaining essentially flat, the trade sector will support real GDP growth of 1.4 per cent this year.”
The report adds that next year’s outlook “is much brighter” with investment spending forecast to help the economy post growth of 2.0 per cent. Due to the slowdown, the Bank of Canada is expected "to remain on the sidelines this year with rate hikes not expected until 2020.”
To learn more, consult the report here.