Canada: 2020 growth forecast raised to 1.8% – NBF

Krishen Rangasamy, analyst at National Bank Financial, suggests that while minority governments tend to be short-lived, that does not necessarily mean Canada is set for policy gridlock and a quick return to the polls.

Key Quotes

“With the balance of power resting in the hands of the New Democratic Party, whose platform intersects with that of his own Liberal party, Prime Minister Trudeau is likely to find support for some of his proposed policies.”

“We have accordingly raised our 2020 growth forecast by two ticks to 1.8%. The output gap, which is estimated by the Bank of Canada to remain open through 2021, could be eliminated sooner if, as we expect, fiscal stimulus is deployed by the new federal parliament.”