Trade To Drive Growth

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    International trade is expected to be the key driver of Canadian economic growth in 2015 as exports continue to receive a boost from a weak Canadian dollar, an accelerating U.S. economy, and, to a lesser degree, an improving European economy, says Russell Investments’ ‘2015 Global Annual Outlook.’ “While critical risks remain ‒ primarily the direction of commodity prices, oil in particular, we believe a strengthening domestic economy coupled with stabilizing oil prices over a 12-month horizon should translate into modest returns for domestic equities in 2015,” says Shailesh Kshatriya, associate director, client investment strategies, at Russell Investments Canada Limited, who authored the Canada market perspective section of the global report. The report notes the key risks to growth in 2015 in Canada will be housing and commodity prices ‒ with the price of oil being the true wildcard. “There is no way to sugarcoat the fact that household debt levels are stretched and home prices elevated. However, we believe the Bank of Canada will be sidelined for much of 2015. In the absence of rate increases, the risk of a sharp decline in home prices may well be contained yet another year; nonetheless, it’s a risk which cannot be ignored,” says Kshatriya.