Royal Bank of Canada paints rosy forecast

In the bank's June 2012  "ECONOMIC AND FINANCIAL MARKET OUTLOOK" [1]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