Key forecast calls for 2017

The underlying momentum in the economy remains sluggish and circumstances aren’t likely to improve next year, mainly because of a worsening downturn in housing investment. We expect GDP growth to be only 1.2% in 2017, down slightly from an already muted 1.3% in 2016. Core inflation will soften and, in contrast to the consensus, we expect the Bank of Canada to cut interest rates in the first half of next year, to only 0.25%.