Due to the Xmas break, I didn't really pay much attention to the latest prediction of US fourth quarter GDP growth from the Atlanta Fed's GDPNow model. However on December 23th, the prediction dropped from 1.3% from 1.9%, well below consensus.
If that's true, that's a bad number for the fourth quarter and not good for Canada and especially Ontario's fourth quarter GDP number, as the US is both of their largest market for exports. However GDP can be lowered by higher imports or lower exports, so with the low Canadian dollar it is possible the lower US number was affected by bad trade numbers. Thus maybe things aren't so bad for Ontario having higher exports, although I'm skeptical of the Ontario economy to adjust rapidly to a low dollar, given its high proportion of housing and services in its economy.
I'm still waiting for the third quarter numbers for Ontario's GDP. It should be the strongest one for the entire year, although that will likely not be enough to rescue the year from a sub 2% number, with the possibility of a number closer to 1%. Note that the province's financial accountability officer is predicting GDP growth of 2% in 2015.
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