Surprising growth surge forces forecasters to revisit economic predictions
OTTAWA — A surprisingly powerful performance from the Canadian economy is pushing some forecasters to change their outlooks — starting with their predictions for Wednesday’s central bank rate announcement.
It’s also led others to start questioning whether the Trudeau government’s multibillion-dollar plan to boost infrastructure spending for the coming years risks overheating the already-sizzling economy.
Last week, the latest growth numbers showed the economy expanded at an annual pace of 4.5 per cent in the second quarter of 2017. The bigger-than-expected surge, driven by consumer spending, followed an impressive jolt of 3.7 per cent growth over the first three months of the year.
The growth, which is measured by real gross domestic product, caught markets by surprise and has many experts revising their expectations on when the Bank of Canada will hike its trend-setting rate.