12/19/2012 09:58 EST | Updated 02/18/2013 05:12 EST

CIBC downgrades domestic economic outlook

The Canadian economy is in for weaker growth in 2013 than previously expected, according to CIBC's latest economic forecast.

The bank cites a continued weak global economy and a lack of key domestic economic drivers for its lowered forecast of economic growth next year. CIBC now says it expects Canadian GDP to rise by a "very mediocre" 1.7 per cent in 2013, down from its earlier prediction of 2.0 per cent.

That's more pessimistic than the Bank of Canada's prediction that growth next year will come in at 2.3 per cent.

"Having earlier tapped fiscal stimulus and a housing boom to shelter the economy from sluggishness abroad, the country's ability to set its own course is now much more limited," said CIBC chief economist Avery Shenfeld, in a statement.

"Escaping economic mediocrity will depend on the kindness of strangers, with exports and related capital spending critical to Canada's fate in 2013-14."

Shenfeld does see economic growth rebounding in 2014 to 2.5 per cent, powered by a stronger Chinese economy and an upswing in the U.S. housing market.

CIBC's pessimism about 2013 stands in marked contrast to RBC's outlook issued just six days earlier.

RBC economists see the Canadian economy strengthening by 2.4 per cent next year, powered by export strength.