Canada Country Risk Report Q3 2015 - New Market Study Published

Core Views

* The collapse in global oil prices will see Canada's energy-related fixed investment fall and rising unemployment hurt household spending levels this year and next.
* A sharp decline in goods imports and demand for personal travel services will largely offset the adverse effect of lower oil prices on Canadian crude exports this year, ensuring a continued narrowing of Canada's current account deficit.
* The Canadian dollar will remain under considerable downside pressure as oil prices remain low and short-term interest rates in Canada and the US continue to diverge.

Key Forecast Changes

* We have lowered our real GDP growth forecast from 2.1% to 1.5% in 2015 and see growth climbing to just 1.7% in 2016, from our previous forecast of 2.3%, falling oil prices will see a sharp drop in fixed investment.
* We have revised up our current account deficit forecast for Canada from 1.5% of GDP to 1.7% in 2015, on account of a decline in the value of goods exports.
* We now expect the Canadian dollar to average CAD1.26/USD in 2015, compared to our previous forecast of CAD1.20/USD, as an interest rate cut and lower oil prices will see additional downside for the exchange rate.
* We forecast an additional 25bps cut to the overnight rate to 0.50% in 2015, and see rates on hold until 2017.

Full Report Details at
- http://www.fastmr.com/prod/987511_canada_country_risk_report_q3.aspx?afid=301

Key Risks To Outlook

* With falling fuel prices being, on balance, a boon for Canadian households, our revised private consumption forecast may be overly pessimistic, suggesting upside risks to our near-term real GDP growth forecasts.
* Over the longer term, however, risks to our economic growth outlook are skewed to the downside, as the large household debt stock and falling employment expectations may necessitate a prolonged deleveraging process.

The Canada Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Canada. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Canada's economic, political and financial prospects through end-2019, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

* Forecast the pace and stability of Canada's economic and industry growth through end-2019.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
* Contextualise Canada's country risks against regional peers using BMI's country comparative Risk Index system.

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