"Our view stands in contrast to the more rosy consensus forecast that GDP growth will accelerate to 2.3% in 2014"
- Amna Asaf and David Madani , Capital economists
Many positive outlooks for economic growth of Canada in 2014, which have been supported by a better than expected performance in the third quarter of last years along with a recovery of the global economy overall, might be overoptimistic. The Bank of Canada expects expansion for 2013 coming in at 1.6%, after the 1.7% growth in 2012. The optimistic forecast for the nation's economy followed back-to-back the 0.3% gains in September and October, with momentum likely to spill over into the last two months of 2013. For the year of 2014, the central bank sees a 2.3% advance. The long anticipated recovery in the U.S., where annualized growth came in at 4.1% in the Q3, means that Canada should benefit from increasing exports to its biggest trading partner. Despite this fact, many economists expect much weaker growth in Canada this year.
Meanwhile, Canada is seen to post a bigger than expected budget surplus in the 2015-2016 fiscal year and manufacturers will be supported by a weaker currency, according to Jim Flaherty, Canada's Finance Minister. The finance department forecasted in November a budget gap of C$17.9 billion for the fiscal year, which started April 1, narrowing to C$5.5 billion next year and changing to a C$3.7 billion surplus the following year.
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