01/28/2016 11:18 EST | Updated 01/28/2017 05:12 EST

Canada's Economy Downgraded Again By CIBC, But 'We May Be Overdosing On Pessimism'

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Canadian Imperial Bank of Commerce (CIBC) signage is displayed outside of the company's office near Bay Street in Toronto, Ontario, Canada, on Monday, Aug. 29, 2011. Bay Street is the center of Toronto's Financial District and is often used as a metaphor to refer to Canada's financial industry. Photographer: Brent Lewin/Bloomberg via Getty Images
TORONTO — One of Canada's big banks is cutting its economic forecast for the country for a second time in a matter of weeks.

CIBC World Markets is now estimating the country's gross domestic product will grow by only 1.3 per cent this year, after adjusting for inflation.

That's down from its previous forecast last month of 1.7 per cent growth in GDP.

avery shenfeld

CIBC chief economist Avery Shenfeld, pictured in 2010, is warning that "we may now be overdosing on pessimism," even as the bank cut its outlook for Canada's economy. (Canadian Press photo)

CIBC chief economist Avery Shenfeld says a major concern is global investor sentiment, which has resulted in lower stock prices, changes on the bond market and a buildup of cash in Canadian households.

But Shenfeld warns against an "overdose on pessimism" and says he expects a modest increase in commodity prices in 2016.

The decline in global prices for oil and other commodities produced by Canada was a major reason for CIBC's previous economic downgrade for the economy, released in December.

"It's unusual for us to want to reconsider a full-year outlook that we published only a month ago, but then again, these are unusual times," Shenfeld said in the forecast released Thursday.