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Canada Country Risk Report Q1 2019

Canada Country Risk Report Q1 2019

The Canadian economy will slow over the medium term as robust levels of private consumption production grind lower to more sustainable levels

The Bank of Canada will engage in relatively cautious monetary tightening Rising interest rates will provide support to the Canadian dollar, underpinning our neutral view on the unit versus the US dollar

The federal government will raise spending in the years ahead, including on infrastructure, in line with the ruling Liberal Party's economic platform Major Forecast Changes

We forecast the 2019 budget deficit to come in at 0 7% of GDP, revised from 0 6% previously

Key Risks

A frothy housing market and record levels of household debt continue to raise questions about macroeconomic stability

Despite agreeing a bilateral trade deal with the US, risks to the global trade system remain pronounced A trade-related downside shock to global growth and commodity prices would adversely affect Canadian exporters Canada Country Risk Q1 2019


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Canada's Emerging Capacity Constraints Will Crimp Growth
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
External Trade And Investment Outlook
Canada's Current Account Will Remain In Deficit Over The Medium Term
Monetary Policy
Bank Of Canada Will Cautiously Tighten Monetary Policy In 2019
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Canada's Modest Fiscal Deficits Here To Stay
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
Currency Forecast
CAD: Likely To Range Trade Against USD Over The Medium Term
TABLE: CURRENCY FORECAST
Canada Country Risk Q1 2019THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Contents10-Year Forecast
The Canadian Economy To 2027
Structural Factors Will Constrain Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Trudeau Likely To Win Second Term In Canada In 2019
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Political Outlook To Remain Stable
Global Macro Outlook
Continued Growth Divergence And Policy Risks Ahead
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: CANADA – MACROECONOMIC DATA & FORECASTS

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