RBC Business Segments and Market Strategy
2016 Economic Outlook
Projected Economic Indicators for 2016 (1)
RBC
Unemployment
Interest Rate
Current Account
GDP Growth
Inflation
Rate (2)
(3 mth T-bills)
Balance/GDP (2)
Budget
Surplus/GDP (3)
Canada
1.8%
1.7%
6.8%
0.6%
-3.9%
-0.2%
U.S.
2.3%
1.3%
4.9%
0.7%
-2.9%
-2.0%
Euro Area
1.6%
0.6%
10.5%
NA
3.6%
-1.9%
Canada
U.S.
■ The Canadian economy is poised to modestly grow in 2016 alongside a slight rise in crude oil
prices. Firm export performance from a strengthening U.S. economy is expected to be
accompanied by persistent growth in household spending and a smaller, although still significant,
decline in energy sector investment
■ The Bank of Canada is expected to maintain its current policy stance as it awaits evidence that the
economy is transitioning towards the non-resource sectors being the key drivers of growth
■ Consumer spending is expected to remain a key source of economic growth while housing market
activity, nationally, will likely continue to be supported by accommodative borrowing conditions
■ Economic growth in the U.S. is expected to remain solid in 2016 led by sustained growth in the
domestic side of the economy; namely, consumer spending and business investment. Less drag
on economic growth from net trade in 2016 is expected as the U.S. currency is poised to stabilize
■The U.S. Federal Reserve is expected continue to withdraw monetary policy stimulus in 2016 as
unfolding domestic developments confirm sustained progress towards achieving the Fed's
objectives of full employment and price stability
Π
A broadening out of the drivers of economic growth is expected to support the ongoing Euro zone
recovery in 2016, although growth is expected to remain subdued
· Significant monetary stimulus by the European Central Bank has curbed deflationary risks
■ A sluggish pace of structural reforms is expected to keep growth subdued in parts of the Euro zone
■ Financial stress is likely to weigh on economic activity in 2016
■
Euro area
Economic Backdrop
(1) RBC Economics Research as of February 12, 2016 and reflect forecasts for calendar 2016. (2) European Commission, RBC Economics Research. (3) Department of Finance,
Congressional Budget Office, European Commission, RBC Economics Research.
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