New forecast consensus still too high

Although most private-sector forecasters have revised down their GDP forecasts for Canada, they still seem too high to us. The latest surveys show that consensus expectations for real GDP growth over the next year or two are close to pre-crisis historical growth rates. Considering that these recent GDP growth averages were influenced by one of the longest global credit cycles in history and a decade long domestic housing boom, we think the new consensus is still overly optimistic.