The Canadian economy will overcome any effects from the crisis in Japan and expand faster than was expected a few months ago, TD Bank says.
The bank’s new forecast has the economy growing strongly in the first half of this year and slowing in the latter half. For the year, TD expects the economy will expand by three per cent, half a point more than its previous estimate and 0.6 percentage points higher than the Bank of Canada’s projection.
“You don’t want to minimize what’s happening in Japan,” TD chief economist Craig Alexander said, “but it’s still the case that the economic climate in the world is quite good. For Canada, we’re going to have moderate growth, low inflation, solid profit growth, low albeit rising interest rates … this is actually a pretty benign economic environment.”
TD’s sunnier outlook stems from the strong 3.3 per cent growth in the fourth quarter, a more optimistic outlook for Canada’s biggest trading partner â€” the United States â€” and higher demand for commodities.