Despite signs of underlying strength, Canada will continue to see muted economic expansion in 2020, S&P Global Ratings said as it raised the country's real GDP growth forecast for the next year to 1.6% from a previously projected 1.4%.

The forecast is still below the country's potential growth rate, S&P Global Ratings said. The rating agency maintained its GDP growth forecast for the present year at 1.5%.

Real GDP growth in the third quarter eased to 1.3% from 3.5% in the previous quarter, but domestic demand growth was significant with a 3.2% rise as business investment and housing climbed 2.6% and 3.2%, respectively. That growth balanced a 1.5% fall in exports, the rating agency said.

S&P Global Ratings reiterated its expectations that the Bank of Canada will maintain its key rate at 1.75% through 2020, despite the below-potential growth outlook.