2015 Economic Challenges Continue

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    The challenges of 2015 are expected to continue in 2016 as energy companies retrench and business investment drops with oil prices likely to remain lower than previously expected, says the ‘RBC Economics Outlook.’ Still, Canada’s real GDP is projected to grow by 1.7 per cent this year ‒ a stronger showing than 2015’s 1.2 per cent rise. The report expects another year of solid consumer activity and firmer exports to underpin growth next year. Further, the federal government is expected to announce fiscal stimulus measures in the upcoming budget that will also provide a lift to the economy. “While another year of retrenchment by energy companies will dampen 2016’s rise, manufacturing sales jumped in November and December and exports are showing signs of strength,” says Craig Wright, senior vice-president and chief economist, RBC. “The shift in the drivers of growth that began in 2015 from commodities based companies to other sectors is an essential part of the economy’s ongoing transition.” The continuation of the transition in the drivers of growth will likely result in real GDP expanding at a slightly faster pace in 2016 relative to 2015.