RBC trims economic growth forecast
The Royal Bank has "slightly pared back" its economic forecast for Canada in 2010 and 2011 as growth is easing in the second half of the year.
The bank is projecting Canadian GDP growth of 3.3 per cent for this year, down from the 3.6 per cent growth estimated in the second quarter, it said in a news release Friday.
Forecast growth in 2011 has also fallen by 0.3 percentage points, to 3.2 per cent from 3.5 per cent in the bank's projection last quarter.
RBC's 2010 provincial growth forecasts | ||
| Province | Forecast (%) | Change from previous forecast (% points) |
| B.C. | 3.3 | - 0.2 |
| Alberta | 3.5 | + 0.4 |
| Sask. | 6.3 | + 2.5 |
| Manitoba | 2.0 | - 0.9 |
| Ontario | 3.5 | - 0.3 |
| Quebec | 3.0 | - 0.5 |
| N.B. | 2.3 | - 0.1 |
| Nova Scotia | 1.8 | - 0.4 |
| P.E.I. | 2.1 | - 0.5 |
| N.L. | 3.3 | - 0.8 |
| Canada | 3.3 | -0.3 |
| Source: Royal Bank | ||
"Concerns in the U.S. and nervousness about the health of the global economy are weighing on the outlook for the second half of the year," said Craig Wright, senior vice-president and chief economist.
The U.S. forecast is down by 0.4 percentage points in both years, to 2.7 per cent in 2010 and three per cent in 2011.
The bank is predicting that the Canadian dollar will end 2010 at 93.45 cents US and will rise toward parity by mid-2011. The dollar closed at 96.74 US on Thursday.
Most of the workers who lost their jobs in the recession have found new work, and RBC expects the unemployment rate will fall to 7.3 per cent by the end of 2011, down from eight per cent in the second quarter.
Among the provinces, the bank has forecast big gains in Saskatchewan (jumped to 6.3 per cent from the former forecast of 3.8 per cent) and Alberta (up to 3.5 per cent from 3.1 per cent).
Changes in most provincial forecasts were small, but Manitoba was cut by 0.9 percentage points to two per cent.