Speaking as part of Calgary Economic Development’s (CED) 2016 Economic Outlook, Bank of Canada governor Stephen S. Poloz laid out his forecast for Canada’s economy in the upcoming year.
With more than 1,500 on hand for the presentation, Poloz touched on some of the factors that have seen Canada’s economy get off to a less-than-stellar start this year.
CREB®Now takes a look at some of the key points from CED’s outlook.
Having seen two consecutive quarters of GDP decline, Canada’s economy currently fits the definition of being in a recession. Looking forward, TD forecasts call for an annual growth rate of
1.2 per cent in 2015, followed by two per cent gains in 2016 and 2017.
Speaking on downsizings in Calgary’s energy sector, CED president and chief executive Mary Moran said more layoffs should be expected, calling it the most challenging time for the city since the mid-1980s. ATB economist Todd Hirsch has predicted unemployment rate in the province could reach 7.5 per cent, which would be the highest rate seen since 2009.
Falling from as high as $107 US last summer to as low as $38 in recent months, the price of a barrel of oil has been pointed to as the primary cause for the Canadian economies current malaise. During his presentation, Poloz predicted oil would average around $45 per barrel this year, reaching $60 by the end of 2016.
Speaking on the Canadian dollar’s close correlation with fluctuating oil prices, Poloz said Canada’s floating exchange rate has helped to absorb some of the impact of these price
movements. He said the bank has focused its policy on adjusting to future fluctuations in oil prices.
With the U.S. economy faring far better than its northern neighbour, Conference Board of Canada vice-president and chief economist Craig Alexander said the U.S. economy “should help to pull the Canadian economy along via stronger export growth.”