- Created on Tuesday, 26 June 2012 13:43
- Written by glenn szlagowski - financial adviser
Royal Bank of Canada paints rosy forecast
In the bank's June 2012 "ECONOMIC AND FINANCIAL MARKET OUTLOOK" the Royal Bank forecasts that real Canadian GDP (economic growth) numbers will jump by about 50% to 3.0% or more when the second quarter numbers are released. This performance was forecast to stay around the 3.0% level for the balance of the year:
"Canada’s underlying fundamentals are positive and with a bump from U.S. demand, we expect the economy to grow by 2.6% this year and next.
... the data signal that the momentum in these two economies [Canada and U.S.] is increasing. In fact, in our view, both are about to break into a period of faster growth."
The Royal Bank believes growth in the Eurozone has been flat so far this year and might flirt with a recession later in 2012.
But the bank says this temporary and; "Stimulative monetary policy and incentives aimed at bolstering investment and employment are expected to skate the euro area economies back into the black by year end with growth [in Europe] forecasted to average 1.1% next year."
The bank concludes; "The world economy faces headwinds coming from Europe although it is likely to weather the storm given monetary policy support and a strengthening in U.S. growth."
Although the report is still cautious about Europe, in a sea of pessimism it is refreshing to see a optimistic forecast for a change.
The full report is available to the public on the Royal bank web site. See source below for the web address.
Source: ECONOMIC AND FINANCIAL MARKET OUTLOOK - June 2012 http://www.rbc.com/economics/market/pdf/fcst.pdf