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 2007
Canadian Outlook Economic Forecast: Summer 2007
Canadian Economic Analysis
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- The U.S. economy should rebound strongly from a very weak first-quarter performance. Consumer spending is hanging on despite slumping new home construction, while business investment and trade will also add to growth.
- Real gross domestic product (GDP) growth for Canada is forecast to ease to 2.5 per cent in 2007, as the high-flying loonie will hurt net exports. Economic growth is expected to accelerate to 3.2 per cent in 2008, helped by a better trade performance and steady domestic demand.
- Core inflation nationally has recently been boosted by overheated Western provincial economies. The Canadian dollar’s surge to above US$0.95 is expected to restrain the Bank of Canada from raising short-term rates further.
- The general rise in commodity prices may be here to stay. Seemingly insatiable global demand for raw materials, coupled with a recovery in forestry product prices, should keep prices elevated and shore up resource revenues and investment.
- Sound the trumpets . . . Canada’s provincial governments are all expecting surpluses! Spending by all levels of government is expected to continue growing at a strong and steady pace.
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