The positives are led by expectation of mass vaccination through the first half of 2021, which the report suggests will provide an overweight boost for the services sector.
With low interest rates and government support packages continuing, there should be a strong platform for growth, especially as there is still pent-up demand in some sectors.
“By mid-year we expect certain sectors, such as travel and tourism, to bump against capacity constraints as long-delayed holidays and other spending materialize,” said Frederick Demers, Multi-Asset Solutions director at BMO GAM. “As normalcy returns, consumer spending is expected to grow and unemployment rates to be meaningfully lower than current rates. Heading into 2021, we are optimistic we will see improved economic conditions and better times ahead.”
Weaker spots
Despite the overall positivity, the report highlights where weakness is set to remain.
The Canadian economy is forecast to lag recovery in the US and globally with the federal deficit continuing to grow as relief programs remain in place.
