Canada's recovery is lagging so government support will be needed: CIBC's Tal
Economists revised their growth estimates for Canada higher this year, though the recovery is expected to lag the U.S.
Canada’s economy is expected to expand 4.7 per cent in 2021, according to Bloomberg’s latest monthly survey of analysts. That’s up from a previous yearly estimate of 4.4 per cent. Growth in 2022 is seen at 4.1 per cent, little changed from the January survey.
The upward revision reflects what has been a more upbeat outlook in recent weeks. The global vaccine rollout, rising commodity prices that help Canada and potential impacts from more fiscal stimulus in the U.S. are driving the more optimistic predictions.
But economists upgraded U.S. growth by even more than in Canada, seeing it at 4.9 per cent in 2021 versus a 4.1 per cent estimate only a month ago. If the projections prove right, the U.S. will have outperformed Canada for a fourth straight year.
Canada’s economy is estimated to have contracted by 5.4 per cent in 2020, versus a decline of 3.5 per cent in the U.S.