This quarterly economic forecast examines the short-term economic outlook for Canada – all major components including consumer expenditures, housing, government, non-energy business investment, and trade. The outlook for the financial, labour, and energy markets is also given along with costs and prices. The U.S. economic outlook is presented in a separate section.
Canadian Outlook Economic Forecast: Summer 2006
Canadian Outlook Economic Forecast: Summer 2006
Canadian Economic Analysis
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- Strong consumer spending and private investment drove economic growth to an annualized 3.8 per cent pace in the first quarter of 2006.
- A new federal budget and better-than-expected revenues for provincial governments have resulted in even more fiscal stimulus than incorporated into our last Canadian Outlook.
- Despite a strong domestic economy, real GDP growth will be limited to 3.1 per cent in 2006 by further erosion in the trade balance.
- The Bank of Canada is expected to remain on the sidelines for now as a loonie near US$0.90 continues to mitigate inflationary pressures.
- Inflation is more prevalent in the United States. The Fed is expected to lift rates another 25 basis points to ensure slower growth in aggregate demand.
- While some commodity prices have softened recently, energy prices are expected to remain elevated through the end of 2007.
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