Once the pandemic loosens its grip on Canada and the world, economic growth will slow down sharply from the plus 4.0 per cent increase forecast for 2022 as the economy returns to some state of normalcy.
Growth prospects are comparatively weak because the aging of Canada’s population will lead to a slowdown in labour force growth, which will limit consumer and investment spending.
Weaker growth in Canada’s labour force is reflected in the downward trend in the aggregate participation rate. Although the participation rate has recovered somewhat from the slump during the height of the pandemic last year, we expect it will resume a structural downward trend caused by an aging baby-boom cohort.
- As U.S. Population Ages, Economic Growth to Ease
- Demographics Rule the Day
- Two Conflicting Trends Affecting Potential Output
- Could Higher Inflation Persist?
- Fiscal Deficits as Far as the Eye Can See
- Lingering Pandemic Effects Plus Population Aging to Restrain Aggregate Demand