Canada Economic Outlook

The Canadian economy has been running near capacity for a number of quarters. Growth has slowed from around 3.0% yoy in 2H17 to 2.1% yoy in 3Q18 – still slightly above trend, but on a steady path of deceleration toward it. Recent downward revisions to the pace of GDP growth since 2015 have led the Bank of Canada (BoC) to note that there may be somewhat "more room for non-inflationary growth". Concurrently, the sharp decline in oil prices, Alberta's announced output cuts, a contraction in business investment in 3Q, and a soft hand-off to 4Q growth from a mom contraction in September have led us to revise our projected path for economic growth in 2019, with a much slower start to the year.

Economic Outlook Canada Economic Outlook