Exports to help lift Canadian economy, housing a real risk: Reuters poll

Thu Oct 16, 2014 10:28am EDT
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By Leah Schnurr and Deepti Govind

TORONTO/BANGALORE (Reuters) - A pickup in exports will foster stronger economic growth in Canada next year, a Reuters poll found, but many forecasters in the survey expressed concerns over the risks of a housing market correction.

A weaker U.S. recovery or an oil price shock, which were listed in the poll as some of the risks to global economic growth over the coming year, could also weigh on Canada's economic expansion.

Canada's economy will grow 2.3 percent this year, before picking up to 2.5 percent in 2015, according to the median consensus of 32 economists surveyed over the past week.

Those predictions are similar to the previous poll in July and slightly stronger than the Bank of Canada's estimates.

Falling oil prices in the past two weeks have driven an exit from Canadian stocks - its benchmark TSX equity index .GSPTSE fell to an eight-month low of 13,869.88 on Wednesday.

Ten of 13 forecasters who responded to the question said they were confident the recent pickup in exports will give a sustainable boost to the economy, something policymakers have long been hoping for.

An acceleration in the U.S. recovery is expected to be the driving force as exporters reap the benefits of better demand and a weaker Canadian dollar.

A sister Reuters poll showed the U.S. economy will grow at a slightly better rate this year than previously thought. [ECILT/US]   Continued...

Buildings are seen in the financial district in Toronto, January 28, 2013.  REUTERS/Mark Blinch