In its most recent MPR, the Bank of Canada produced a growth forecast for 2010 that seems rather optimistic compared to some private sector forecasts:
Bank of Canada 3%
Merrill Lynch 2.7%
Bank of Nova Scotia 2.5%
Royal Bank of Canada 2.5%
Shock Minus Control 2.5%
Bank of Montreal 1.8%
CIBC 1.5%
Toronto-Dominion Bank 1.4%
One probable reason for the variance between my forecast and the Bank’s is the Bank's assumption of an 87 cent US/CAD exchange rate versus my model range of 87 to 95 cents. Indeed, I can account for quite a bit of the variance between my own forecast and the Bank's simply by tweaking the exchange rate assumption.
Bank of Canada 3%
Merrill Lynch 2.7%
Bank of Nova Scotia 2.5%
Royal Bank of Canada 2.5%
Shock Minus Control 2.5%
Bank of Montreal 1.8%
CIBC 1.5%
Toronto-Dominion Bank 1.4%
One probable reason for the variance between my forecast and the Bank’s is the Bank's assumption of an 87 cent US/CAD exchange rate versus my model range of 87 to 95 cents. Indeed, I can account for quite a bit of the variance between my own forecast and the Bank's simply by tweaking the exchange rate assumption.
3 comments:
How do the forecasts compare over 2009? Is it the case the the Bank is forecasting a deeper trough, so the sharper growth is simply a bounce back up to the levels that everyone else is forecasting?
Maybe a graph of the forecasted paths of the levels of GDP might show things that are being masked by taking the differences.
No - the Bank is pretty optimistic about the back half of 2009 with Q2: -3.5%, Q2: 1.3% and Q4: 3%.
Ah. Thanks.
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