RBC Economics has downgraded its forecast for the Canadian economy prompted by ongoing weakness in the energy sector.

The bank says Canada’s real Gross Domestic Product is projected to grow at just 1.2% this year, down from its June prediction of 1.8%.  The bank also predicts 2.2% growth next year, almost half a point lower than its previous prediction.

RBC says while the economy contracted mildly in the first half of the year, the depth of the decline was marginal and the the weakness was concentrated mostly in the energy sector.

On the plus side, RBC expects positive economic activity outside the energy sector to offset momentum lost in the first two quarters of 2015.  It adds, as oil consumers, prospects for Ontario, British Columbia and Quebec are brighter than the oil producing provinces of Alberta, Newfoundland and Labrador and Saskatchewan.