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Canada Economy Expected To Grow

Canada’s economy is expected to grow between 1.7 per cent to two per cent this year, with risks skewed to the downside amid concerns regarding the housing market and domestic crude oil-price fundamentals, says Russell Investments ‘Strategists’ Outlook and Barometer’ which updates its ‘Annual Outlook for 2013.’ “A slowing housing market creates a reverse ‘wealth effect’ that could restrain household spending,” says Shailesh Kshatriya, associate director, client investment strategies, at Russell Investments Canada, who authored the ‘Canada Market Perspective’ section of the global report. “As well, market volatility related to issues such as the recent banking crisis in Cyprus will continue to cause anxiety for conservative investors.” He believes the weak domestic economy means the Bank of Canada is unlikely to raise interest rates for the rest of the year and that the central bank’s target interest rate will remain at one per cent until 2014. On the other hand, the low rates and a slightly weaker Canadian dollar may encourage investment spending and could boost the domestic manufacturing sector. As well, he believes the ongoing U.S. economic recovery could be beneficial for Canada.

Courtesy of Benefits and Pensions Monitor website News Alerts

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