TORONTO (Reuters) - Private forecasters have raised their 2010 estimates for Canada’s economic growth, saying the near-term outlook has “improved further” since a March survey, the Canadian Finance Department said on Monday.
The department said its survey of 14 private-sector forecasters predicted 2010 real GDP growth of 3.5 percent, up from 3.1 percent in the March survey. Nominal GDP growth is now pegged at 6.8 percent, compared with 6.0 percent.
It was the second time since the December survey that both real and nominal gross domestic product were revised higher by the private forecasters.
The government has used the average of private sector forecasts as the base for its fiscal planning since 1994, a method that aims to ensure independence in its estimates.
When the government presented its budget plans in March, private sector forecasters had expected the economy to grow by 2.6 percent this year.
“As a result of stronger expected growth in 2010, the level of nominal GDP is expected to be about C$24 billion ($23.5 billion) higher in 2014 than projected in the budget and C$10 billion higher than expected in March,” the government said.
“This suggests that the medium-term fiscal forecast presented in budget 2010 remains on track.”
Recent data showed Canada’s economy expanded at the fastest clip in more than a decade in the first quarter, as consumer spending, a hot housing market and a return of business investment helped boost gross domestic product by an annual rate of 6.1 percent, the biggest jump since the fourth quarter of 1999.
A recent spate of second-quarter data has shown a less robust pace of growth, in line with economists’ expectations.
Forecasters now expect consumer price inflation of 2.0 percent this year, compared with a previous view of 1.8 percent, and in line with the Bank of Canada’s target.
Inflation is then seen edging up to 2.3 percent in 2011 and 2.2 percent in 2012, also slightly higher than in previous views of 2.2 percent and 2.1 percent, respectively.
The unemployment rate is seen lower across the forecast period, 2010-2014, compared with the March survey. The jobless rate is seen at 8 percent this year, down from 8.1 percent in the March survey.
The government said it will provide an updated medium-term fiscal forecast this fall.
Reporting by Ka Yan Ng; editing by Rob Wilson