OTTAWA—The TD Bank says Canada’s economy is going through a soft patch and the growth rate for the rest of the year will come in below two per cent.
The new forecast estimates growth has slowed to about one per cent during the current third quarter that ends on Sept. 30, making it the weakest three months of the year.
The bank blames global turbulence for most of the weakness, but adds that fatigued Canadian households, a correction in the housing market led by the sharp downturn in Vancouver and deficit-cutting governments are also factors.
TD says it expects the slowdown in the housing market that has emerged in Vancouver will become more broad-based as a result of the recent tightening of mortgage rules.
Meanwhile, it forecasts Canada’s unemployment rate won’t drop below seven per cent until late next year.
TD says the economy will start picking up steam next year, but growth will still be modest at just above two per cent.