In the forecast, Scotiabank economists Dov Zigler and Derek Holt estimate the economy will likely average 1.9 per cent growth this year, and 1.8 in 2013.
“At best, we’re going to see a very slow-growth environment with downside risks,” said Holt.
He went on to note that most developed countries will be in a similar position. He expects that strong growth will come from emerging economies like India, Indonesia, and China.
The report noted these factors should keep the Bank of Canada on hold at the current policy interest rate setting into 2014.
This goes against indications from Mark Carney who has signalled there may be a rate hike in the future. An article from The Canadian Press explains Holt’s argument, saying “that given that many global central bankers are easing lending conditions, any counter action from Canada will light a spark under the dollar, further weakening exports.”