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Canada Country Risk Report Q4 2018

Canada Country Risk Report Q4 2018

Key View:

The Canadian economy will slow in 2018-2019 as robust levels of private consumption and soaring energy sector production grind lower to sustainable levels.

Monetary tightening from the Bank of Canada that is more aggressive than the market is expecting will ensure that Canadian dollar strength is maintained.

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 have raised our 2018 real GDP growth forecast to 2.3% from 2.0%, due to stronger global economic conditions and a more robust business investment outlook.

Key Risks

An overheating housing market and record levels of household debt continue to overshadow macroeconomic stability.

Difficult trade negotiations with the US over NAFTA could result in significantly altered trade terms and, in the worst case, see the agreement collapse.


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
Canadian Economy Poised For Slowdown
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: TOP 5 GOODS IMPORTS IN 2016
TABLE: TOP 5 GOODS EXPORTS IN 2016
Monetary Policy
Bank Of Canada To Bring Forward Rate Hikes
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Deficits To Persist In Canada Through To 2023
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
Canada Country Risk Q4 2018ContentsCurrency Forecast
Canadian Dollar Will Remain Range Bound
TABLE: CURRENCY FORECAST
10-Year Forecast
The Canadian Economy To 2027
Structural Factors Will Constrain Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Canada-US NAFTA Deal Likely, But Major Hurdles Remain
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Strong Foundation, But Some Challenges From Within
Global Macro Outlook
Strong Growth, But Greater Headwinds Too
TABLE: GLOBAL MACROECONOMIC FORECASTS
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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