TORONTO - The latest forecast from RBC Economics suggests the Canadian economy is poised to show some growth in the third quarter.

RBC chief economist Craig Wright says improved markets, low borrowing rates and fiscal stimulus have moved the economy forward. As a result, the bank predicts the economy will grow two per cent in the third quarter and by 2.4 per cent in the fourth quarter.

It says a sharp rebound in auto production and a recovery in the housing market will lead the charge.

The report also projects the Canadian economy will grow by 2.6 per cent in 2010.

The bank adds, however, that consumer spending is still being weighed down by the 8.7 per cent unemployment rate, which the bank predicts will edge higher by year's end.

In early 2010, RBC forecasts the unemployment rate will begin to fall and the hiatus in consumer spending will end. However, with the unemployment rate set to remain historically high, inflation is expected to remain below the Bank of Canada's mid-point target of two per cent.

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