The
Canadian economy built on momentum from a 0.6 per cent increase in June, expanding
a further 0.5 per cent in July. Those increases follow equal size monthly
declines in the spring which led to a second quarter contraction of 1.6 per
cent, the largest decline since the second quarter of 2009. A recovery of
output in the mining and oil and gas extraction sector was the primary driver
behind strong growth in July.
While some downside risks remain, particularly due to highly leveraged Canadian households, we expect Canadian economic growth will rebound sharply in the third and fourth quarter as oil production normalizes and the federal government's uptick in expenditures and tax credits impacts the economy. The Canadian economy is forecast to expand more than 3 per cent in the third quarter of this year before leveling off to an average of 2.5 per cent in the second half into 2017.
While some downside risks remain, particularly due to highly leveraged Canadian households, we expect Canadian economic growth will rebound sharply in the third and fourth quarter as oil production normalizes and the federal government's uptick in expenditures and tax credits impacts the economy. The Canadian economy is forecast to expand more than 3 per cent in the third quarter of this year before leveling off to an average of 2.5 per cent in the second half into 2017.
Copyright BCREA – Reprinted with permission
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