Regina, SASKATCHEWAN (Reuters) - Canada’s economy is rebounding following a modest contraction in the first half of the year, boosted by non-energy exports and investment, which will help growth reach 2-1/2 percent in 2017, Bank of Canada Deputy Governor Lynn Patterson said on Tuesday.
Patterson said Canada was adjusting to the decline in oil and commodity prices with lower borrowing rates and a lower Canadian dollar, and reiterated the growth forecast given by the bank in October.
Patterson also repeated the central bank’s view that although the global economy has been weaker in 2015, it will rebound in 2016 and 2017.
Asked about the potential impact if the U.S. Federal Reserve begins raising interest rates next month, Patterson said if the Fed does hike, “it’s because they feel that the U.S. economy is in a strong enough position to sustain that rate increase.
“My general feeling would be that if the U.S. is raising rates, it should be a good thing for Canada,” she added.
The United States is Canada’s biggest trading partner, and a stronger economy south of the border is expected to bolster Canada.
Patterson’s remarks were the last scheduled ahead of the Bank of Canada’s interest rate decision in early December. The bank is widely expected to leave rates on hold at 0.50 percent after cutting rates twice this year to offset the shock to the economy from lower oil prices.
Writing by Leah Schnurr; Editing by Chris Reese and Leslie Adler